Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — TECHNOLOGY

European Economic Community

Mr. Moonman: asked the Minister of Technology whether he will be submitting evidence to be included in Her Majesty's Government's analysis of the effects of entering the European Economic Community.

The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Alan Williams): Yes, Sir. All the relevant Government Departments are involved in the preparation of assessments of the effects of entering the European Economic Community.

Mr. Moonman: If my hon. Friend agrees that there is a series of industries of innovation that can be developed only by an integrated science and tech-

nological policy in Europe, would he say whether proper attention has been given to this aspect and whether the cost of not going into the Common Market has been brought out in the survey?

Mr. Williams: While the survey is not yet completed, every relevant factor will be considered by the Ministry before it reaches final conclusions.

Sweden (Technical Co-operation)

Mr. Moomnan: asked the Minister of Technology if he will make a statement on the recent British/Swedish agreement on increasing technical co-operation in the fields of atomic energy, computer techniques and social technologies.

The Minister of Technology (Mr. Anthony Wedgwood Benn): There is no formal agreement between our two countries, but the visit to the United Kingdom in June of this year by Herr Wickman, the Swedish Minister of Industry, provided a useful basis for the developing technological contacts and co-operation which are taking place. Social technologies are the responsibility of my right hon. Friend the Secretary of State for Local Government and Regional Planning, who is responsible for the wide range of environmental problems.

Mr. Moonman: I thank my right hon. Friend for that statement. With particular reference to computers, as we have a real chance and a lead as opposed to the Americans in Sweden, is any future


development likely to take place, and will my right hon. Friend consider visiting that country?

Mr. Benn: My hon. Friend who was with me and who is now at the Department of Education and Science went to Sweden early in October. There is now a fairly firm pattern of visits, and 1 should like to go to Sweden. The question of computers is best dealt with at the industrial level.

Hydrofoils

Mr. Gresham Cooke: asked the Minister of Technology whether he will make a statement on the Report of the Working Party on Hydrofoils.

The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Neil Carmichael): As my hon. Friend explained to the hon. Member on 22nd October—[Vol. 788, c. 279]—the results of the technical investigations recommended by the working party are now being studied in conjunction with the working party's report. This is still the position.

Mr. Gresham Cooke: Is it not time that we heard something about this hydrofoil report? Is it not true that the working party was set up originally under Mr. Silverleaf two years ago and that an interim report was published 18 months ago? Should not hon. Members now be given a sight of it?

Mr. Carmichael: Any decision on the production of hydrofoil ships in this country is a matter for industry and the Government. It is a potentially very expensive development and, like industry, the Government must consider the matter very carefully indeed.

Mr. David Price: Am I correct in my information that the report of the working party was received by the Minister in November, 1968? In any event, would the hon. Gentleman make copies of it available to hon. Members?

Mr. Carmichael: We had a copy some time ago. Although some of the material in the report is commercially rather secret, I will ask my right hon. Friend to consider the possibility of releasing at least some of the information.

Coal Industry (Unofficial Strikes)

Mr. Lane: asked the Minister of Technology how much coal production was lost through the recent unofficial strikes in the coalfields.

Mr. Patrick McNair-Wilson: asked the Minister of Technology if he will give details of the total tonnage lost as a result of the recent strike in the coal industry; and what effect this will have upon the financial estimates for the year.

Mr. Alan Williams: About 2½ million tons were lost. It is too early to say precisely what the effects will be on the financial estimates for the year.

Mr. Lane: What action are the Government taking to prevent a recurrence?

Mr. Williams: The Government have already indicated their plan on industrial relations [Laughter.]—and, in so far as hon. Gentlemen opposite find this amusing, I would remind them that when the Leader of the Opposition was at the Ministry of Labour the coal industry lost more days in strikes in eight months than it has lost under a Labour Government in three years?

Mr. McNair-Wilson: Can the hon. Gentleman assure the House and the country that the wage increase which has been offered will not result in increased prices to consumers?

Mr. Williams: The hon. Gentleman really must know that nobody could give such an assurance. It has already been indicated by the chairman of the board that some increases may be necessary. I have as yet no statement to make about what the level will be, but discussions are going on with the N.C.B.

Mr. Ronald Atkins: Would not my hon. Friend agree that the British miners have as good a record in industrial relations as any of their counterparts anywhere in the world and that recent events have shown that their record is much better than that of, for example, the miners of Germany?

Mr. Williams: I agree with my hon. Friend. The antagonism displayed towards workers in the nationalised industries by hon. Gentlemen opposite promises that in the unlikely event of their return to office, industrial relations


would deteriorate, particularly in this sector.

Sir J. Eden: While it is in no way a question of antagonism, may I ask the hon. Gentleman whether he is aware that concern is being voiced by my hon. Friends because in this difficult period of contraction these sorts of strikes are taking place and that the resultant buying off by the Government in this respect can only harm the future progress of the coal industry?

Mr. Williams: That sort of statement is not likely to build any confidence in the N.U.M. towards the sort of approach that hon. Gentlemen opposite would have should they ever be returned to power.

Steel Industry (Product Groups)

Mr. Lane: asked the Minister of Technology what consultations he has had with steel consumers about the British Steel Corporation's projected reorganisation into product groups; and whether he will make a statement.

Mr. Alan Williams: The Iron and Steel Consumers' Council has been fully consulted on the proposals and there has also been informed public discussion in the light of the Second Report on Organisation (House of Commons Paper 163) and subsequent statements.

Mr. Lane: As there have been some recent signs of monopolistic behaviour by the Steel Corporation, will the hon. Gentleman undertake that the Government will not give final approval to the reorganisation scheme until they are satisfied that the steel consumers are satisfied?

Mr. Williams: Of course we take the opinion of the consumers into account but it is ludicrous to suggest that there is a monopoly situation in circumstances of world surplus.

Mr. William Hamilton: Is my hon. Friend aware that we in Scotland are grateful to the Corporation for establishing one of its departments in Glasgow?

Natural Gas (Reserves)

Sir J. Eden: asked the Minister of Technology what his latest estimate is of the total reserves of natural gas so far

proven in the United Kingdom Continental Shelf.

Mr. Alan Williams: I estimate recoverable reserves at 27 trillion cubic feet.

Sir J. Eden: Do those figures include the Viking field? Does the hon. Gentleman agree that the fact that so much has already been established indicates that the search has been prosecuted with maximum speed and minimum cost to the taxpayer?

Mr. Williams: This is the most up-to-date information I have been able to obtain and I assume, therefore, that it contains the information the hon. Gentleman refers to. I agree that this is a very encouraging series of discoveries, and we look forward to even better discoveries, when, of course, we have public participation as well in the next stage.

Coal Supplies

Sir J. Eden: asked the Minister of Technology what representations he has received from consumers about possible shortages of coal or other solid fuels; and what reply he has sent.

Mr. Alan Williams: Apart from correspondence arising out of the recent strike the Department has received about 30 letters in the last three months; they dealt with solid smokeless fuels and the replies have been on the lines of the answers given to my right hon. Friend the Member for Belper (Mr. George Brown) on 22nd October and to the hon. Member for Colne Valley (Mr. Richard Wainwright) on 31st October.—[Vol. 788, c. 280–1; Vol. 790, c. 18–19.]

Sir J. Eden: Is the hon. Gentleman aware that the stocks in some cases have been run right down? What efforts are being made now to replenish over and above the usual standing, so as to take account of non-delivery of coal over the Christmas period?

Mr. Williams: There is not much danger of shortage of coal in the circumstances, but there is undeniably a certain amount of difficulty in relation to some solid fuels. There is a later Question on the Order Paper on that subject.

Mr. Leslie Huckfield: What consideration has the Ministry given to issuing a directive to local authorities to withhold


the prescription of smoke control orders until they are assured of guaranteed smokeless fuel supplies?

Mr. Williams: I am not sure that that is the responsibility of my Department. I would require notice of a question of that detail.

Aircraft (Vertical Take-off Projects)

Mr. Fortescue: asked the Minister of Technology when he expects to be able to make a statement about the vertical/ short take-off and landing aircraft projects submitted to him by manufacturers.

Mr. Carmichael: I have nothing to add to my Written Answer of 3rd November, 1969.—[Vol. 790, c. 20.]

Mr. Fortescue: Is the hon. Gentleman aware that within the last few days two German companies have announced their plans to go ahead with the construction of a vertical take-off airliner which can operate between cities? Will he assure us that our lead in this matter, which is vital and has been very significant, will not be frittered away by delays in his Department?

Mr. Carmichael: The hon. Gentleman has always taken an interest in this matter and he knows that a large number of studies are going ahead in this country and abroad. Collaboration with other countries in Europe on this type of travel would be vital for the success of any scheme. Proposals for industrial collaboration would be a matter for the firms concerned. I believe that we are undertaking the studies required and are pushing ahead as well as science and all the other factors will allow.

Mr. Dalyell: What design studies are in progress?

Mr. Carmichael: The next stage is to decide whether there are prima facie grounds for inviting design studies and preliminary general planning after evaluation of the existing evidence.

Development Areas (Assistance)

Mr. William Hamilton: asked the Minister of Technology what was the total amount of assistance given to development areas under the Local Employment Acts in each of the last eight

years; and what proportion of the total went to Scotland.

The Minister of State, Ministry of Technology (Mr. Eric Varley): Payments under the Acts in the eight years to 1968–69 have totalled £267 million, of which f115 million or 45 per cent. went to Scotland. I am circulating the figures for each year in the OFFICIAL REPORT.

Following is the information:


EXPENDITURE ON ASSISTANCE UNDER THE LOCAL EMPLOYMENT ACTS





Scotland




Great Britain £m
£m.
Percentage of Great Britain


1961–62
…
32·8
18·5
56·4


1962–63
…
23·9
14·4
60·3


1963–64
…
16·6
8·0
48·2


1964–65
…
27·3
9·3
34·1


1965–66
…
29·1
11·4
39·2


1966–67
…
43·3
21·1
48·7


1967–68
…
43·7
16·1
36·8


1968–69
…
50·7
16·0
31·6

Mr. Hamilton: Will my hon. Friend confirm that the figures for the early years include once-for-all investment in the motor car industry? If that is the case, will he consider including in his answer the figures for the later years, to take account of investment grants and the regional employment premium?

Mr. Varley: On the first part of my hon. Friend's supplementary question, I confirm that, in the earlier years, the amendments do reflect the substantial assistance given to the motor industry. On the second part, I will consider carefully whether information can be given about investment grants and the regional employment premium.

Mr. Gordon Campbell: What are the Government doing about the net loss of jobs in Scotland of 67,000 in the last three years, about which information is available, comparing this with the net gain of jobs to Scotland between 1960 and 1964?

Mr. Varley: The hon. Gentleman should follow the debates in the House. If he did, he would have seen that considerable assistance has been given to Scotland.

Motor Industry

Sir G. Nabarro: asked the Minister of Technology whether he will now make a further statement on the motor industry


and on measures to stimulate home sales as an ingredient in increased and increasing export performance.

Mr. Benn: Total production of motor cars in the first nine months of 1969 was 1,291,378. This was 4 per cent. lower than in the corresponding period of 1968, a 10½ per cent. fall in home market production being partly offset by a 4 per cent, rise in export production. Although home sales were depressed in the early part of this year, there have been signs of some improvement in demand in recent months. Current trends are kept constantly under review.

Sir G. Nabarro: I recognise that the export performance of this industry has been splendid in the last year or two, but is it not a fact that it will be nearly impossible to go on expanding exports of motor vehicles generally without an accompanying increase in export prices unless the home market is allowed to expand naturally and is not severely curtailed as it has been in the last year or two?

Mr. Benn: The relationship between home market and profitability and, hence, the export success of the industry, is a point which has been regularly put to me by the industry, whose representatives I see regularly, and is the subject of discussion between the Government and the industry, notably in the motor industry E.D.C. These considerations are much in the Government's mind.

Mr. Howie: Has my right hon. Friend noticed that the sale of Bedford trucks has managed to combine record levels of exports and of home market sales? Would he not agree that, were the motor car producing side of the industry able to pursue its objectives with the same vigour as the commercial vehicle side, many of our economic problems would be solved?

Mr. Benn: It is true that, to the extent that the export success of the motor industry leads to an improved balance of payments, in the long run the need for restriction in the home market would diminish. This is part of the whole nature of the problem. But I congratulate the industry on the success to which my hon. Friend drew attention.

Mr. David Price: I assume from the figure the right hon. Gentleman has given

us that this year's total output will be near or below that of 1964. In the circumstances, does the right hon. Gentleman expect the industry to achieve the target of the National Plan, which was an increase of 36 per cent. between 1964 and 1970?

Mr. Benn: I will make available to the hon. Gentleman the forecast figures for this year. I do not have them with me. The motor industry E.D.C. report is the next stage of the planning exercise, and a great deal of work has taken place between the Government and the industry in order to meet the considerations he has in mind.

Nuclear-Powered Merchant Ship

Mr. Wingfield Digby: asked the Minister of Technology what further consideration he has given to a scheme for the use of marine nuclear reactors in merchant ships and in particular for the third generation of container ships.

Mr. Wall: asked the Minister of Technology if he will make a statement on the progress of his consultations with the shipping industry about the construction of a prototype nuclear-powered merchant ship.

Mr. Benn: My Department's study of the cost and benefits of a nuclear ship project is continuing. It is too early yet to make any statement about it. Shipowners have been consulted in the course of this study which takes account of the development of container ships.

Mr. Digby: As four countries — Germany, Italy, the United States and Japan — have all got or are getting these ships, and as we are supposed to be a maritime nation, should not these studies be speeded up so that we are not left in the lurch?

Mr. Benn: Our evidence is that the four countries doing it are doing so at a loss. The question is whether we should do it as well at a loss and thus make five countries doing it at a loss. Our view of this, as in the case of a lot of other things, is that it should be looked at as an economic proposition. There is no doubt that with container ships, particularly with the fleet concept of container ships, the cost-benefit lines may alter in their favour. The problem is not


any delay by the Government in studying this matter. The effect of the studies undertaken suggests that there may be a prestige case, but that as yet there is not an economic case for this development.

Mr. David Price: Is not the real point here that we must look at the possible uses of nuclear-powered vessels in terms of fleet operation and fleet operation only and not in isolation?

Mr. Benn: That is the point I tried to make. The systems approach to container ships as part of a systematic sea transport system might alter the economics, but the Government have no apology to make for having said, having studied it carefully, that the proposal on the present basis would not justify Government support.

Nuclear Power Stations (Orde)

Mr. Wingfield Digby: asked the Minister of Technology how many foreign orders for nuclear power stations have been obtained in the last year; and for what type of reactor.

Mr. Alan Williams: Only three nuclear power stations have been ordered, outside their own countries, during the past year. None of these orders went to the United Kingdom, but a number of firm projects are being actively pursued.

Mr. Digby: I recognise the great success of the Magnox type of reactor, but is not its high initial cost a very serious bar to sales overseas, and would not more sales overseas be of great benefit to the country?

Mr. Williams: The hon. Gentleman is right to say that more sales would be highly beneficial, but the Magnox is one part of the stage of evolving a new technology and it may be that more success can be achieved with some of the newer projects than with some of the older.

Mr. Palmer: Has my hon. Friend's Department studied the relevant recommendations of the Select Committee on Science and Technology in its Second Report, which is now issued? May we have the observations of the Department fairly soon?

Mr. Williams: Naturally, the Department will be considering the recommendations and the information will be available as quickly as possible.

Company Finance (Interest Rates)

Mr. Barnett: asked the Minister of Technology what study he has made of the effect on industry of the current level of interest rates; and if he will make a statement.

Mr. Alan Williams: The level of interest rates is only one factor affecting company finance in industry, and not necessarily the most important. The effect of interest rates, along with other factors, is most readily indicated by the recorded and expected levels of industrial investment which are kept under continuous review by the Government.

Mr. Barnett: It may not be terribly important to my hon. Friend. However, there are many unscrupulous firms which are charging exorbitant rates of interest which bear particularly hard on small companies, especially those in the development areas? Will he consider instituting an inquiry to see whether he can give assistance to firms of this type?

Mr. Williams: I will look at the point my hon. Friend has made, but I am sure that he will bear in mind the difficulties confronting the country and how successful the Chancellor of the Exchequer has been in holding interest rates even as they are, considering the Euro-dollar rate and the impact that is having.

Sir A. V. Harvey: Will the hon. Gentleman get some advice on this matter because he seems to be wide of the mark? Is he not aware that firms are having to pay very high rates of interest on money borrowed for import deposits? He may say that this is not important, but all the sums added together have an adverse effect on our exports.

Mr. Williams:: The hon. Gentleman may have misheard me. I did not say that they were not important; I said that they were not the most important.

Industry (Liquidity Levels)

Mr. Barnett: asked the Minister of Technology what representations he has received about current levels of liquidity in industry; and what replies he has sent.

Mr. Alan Williams: I have received no specific representations on this subject.

Mr. Barnett: Is not my hon. Friend aware that, particularly for small companies in development areas, where it tends to happen very frequently, there is a great shortage of liquidity? Will he consider the possibility of making payments of the investment grants and R.E.P., for instance, in advance of the Government's actually making the payment, so as to assist small companies of this type?

Mr. Williams: That question would probably be better directed to the Chancellor of the Exchequer. I am conscious of the difficulties my hon. Friend has mentioned, but, after all, this is part of the general strategy which is producing a balance of payments surplus ahead of target.

Mr. Emery: Does not the hon. Gentleman agree that it is imperative for export industries and import substitution industries to have the necessary investment and liquidity? Is he not aware that the Government are taking steps which make that difficult?

Mr. Williams: I can only repeat that that point of view is not reconcilable with the fact that our balance of payments improvement is ahead of target and is far better than any hon. Member opposite said we could achieve.

Sir K. Joseph: Is the hon. Gentleman really telling us that he is not aware of the desperate intensity of the lack of liquidity particularly among small firms? Are we to understand that in the private Whitehall discussions which must be going on about the credit squeeze and its relaxation the Ministry of Technology is not representing this point of view to the Chancellor of the Exchequer?

Mr. Williams: The answer to both questions is, "No. Sir".

Industrial Reorganisation Corporation: 

Mr. Biffen: asked the Minister of Technology what proposals he has to redefine the role of the Industrial Reorganisation Corporation in the light of experience so far gained during its existence.

Mr. Benn: I see no need to change the functions which are set out in the 1966 Act.

Mr. Biffen: Is the right hon. Gentleman aware that both in respect of the equity participation in George Kent and in respect of the frustration of the Skefco bid the I.R.C. has established for itself the reputation of being an interventionist nonsense which should go the way of the Department of Economic Affairs?

Mr. Benn: The hon. Gentleman has picked out two of the activities of the I.R.C. of the last three years and entirely left out of account many others. I should have much preferred him to comment on the specific acts in which he thinks the Corporation has engaged and with which he disagrees rather than make a blanket condemnation of a group of distinguished industrialists who in my opinion are doing a very satisfactory job of work.

Mr. Snow: Does my right hon. Friend consider that where there is gross fragmentation of potentially big export industries, the I.R.C. has sufficient resources, physical and financial, to do this work? I have in mind, for instance, the electro-medical industry as being such a case.

Mr. Benn: The I.R.C. is not the only instrument, of course. Quite a number of mergers occur naturally of their own accord. The Ministry of Technology itself is and has been involved in some, notably shipbuilding and the computer industry and in supporting the aero-engine merger. One has to regard the I.R.C. as one of the means by which the problems of fragmentation can be overcome, but not the only one.

Industrial Investment

Mr. Biffen: asked the Minister of Technology what is the expected change in the level of industrial investment during the prospective year in manufacturing industry and distributive trades, respectively; and if such changes are consistent with the Government's policy of restructuring the economy.

Mr. Sheldon: asked the Minister of Technology what estimate he has made of the level of manufacturing investment in 1969 and 1970.

Mr. Alan Williams: The information was given in the latest Investment Intentions Inquiry published on Monday, 20th October. The high level of investment


in 1970 forecast by manufacturers and others is welcomed by the Government. The pace and direction of restructuring the economy are not exclusively dependent upon levels of industrial investment, but the expected levels of investment are not inconsistent with Government policies, given other claims, particularly those of exports, upon resources.

Mr. Biffen: Is it the view of the hon. Gentleman that there is a correlation between the quantity of manufacturing investment and the size of the investment grant? As the sums involved are so gigantic, can he elaborate to the House what that correlation is?

Mr. Williams: I think that the House will recognise that that is the sort of question of which one would need a certain amount of notice.

Mr. Sheldon: May I ask a more practical question? In order to attempt to improve the investment prospects for early next year. will my hon. Friend have an investigation into shortening the repayment period of the investment grant?

Mr. Williams: The Government have already twice shortened the repayment period. I cannot give any commitment beyond that.

Mr. David Howell: Does the hon. Gentleman recall that on 4th February, this year, the President of the Board of Trade announced a study into the effect of investment grants on investments? Is that now the responsibility of some part of the hon. Gentleman's Department? If it is, will he say when the results of the study will be published?

Mr. Williams: It is the responsibility of the enlarged Department. The results will be published as soon as they are in a satisfactory form.

Sir K. Joseph: In the light of the Minister's reference to the necessity for consistency between investments and exports, do the Government really want a further rise in investment?

Mr. Williams: I do not quite see the point of that question.

Sir K. Joseph: May I put my Question in another way? If, as the Minister implies, a further rise in investment may

clash with a rise in exports, and if the Government have not created room for both, do the Government really want a further rise in investment?

Mr. Williams: It is a matter of the quality and quantity of investment. Quality has to be taken into account as well. We are trying to get a better quality of investment which will give us the balance of payments result we require.

Electricity and Gas (Charges)

Mr. Frank Allaun: asked the Minister of Technology if, in view of the profits of the State electricity and gas boards, he will give a general direction to the boards to provide for a reduction of power prices for domestic rather than for industrial consumers.

Mr. Alan Williams: No, Sir. The boards relate their prices to the associated costs, and it would not be in the national interest to deprive industrial consumers of price reductions warranted by the reduced costs of supplying them.

Mr. Allaun: Although it is a triumph for public ownership to produce lower charges alongside higher profits and higher wages, is not my hon. Friend aware of the resentment among Labour supporters that some State boards seem to be much more generous to commercial companies than to the ordinary consumer?

Mr. Williams: My hon. Friend will appreciate that in the long-term development of the power industries it is essential that we should have clear criteria where the appropriate investment should lie, and for this reason there has to be a clear relationship between the pricing of products in different parts of the market.

Mr. Edward M. Taylor: Does the Minister think that we might now be able to make a move towards removing the ridiculous situation whereby consumers in Scotland pay about 26 per cent. more for their gas supplies than the average consumers in England and Wales?

Mr. Williams: What will be the exact impact on Scotland of the introduction of natural gas which, I believe, is due to come next year, I cannot as yet prophesy. All I can say is that, where


it has been introduced, natural gas has been accompanied by reductions in tariffs.

Mr. Lubbock: Is the hon. Gentleman aware that in the long term it is to the benefit of both domestic and industrial consumers for the C.E.G.B. and other generating boards in the United Kingdom to give power at special prices to large industrial consumers and energy-intensive industries—and to the aluminium smelters, which I welcome—and that there is scope for very much more of this kind of activity?

Mr. Williams: There is truth in what the hon. Gentleman says. The encouragement of bulk consumers gives a wider base for spreading overheads and can in the long term have repressive effects on price trends.

Mr. Atkinson: Does not my hon. Friend agree that one primary function of nationalised industries is the redistribution of wealth, and that therefore the decision to give preference to industrial users is a contradiction of a primary function of the public sector?

Mr. Williams: There may be a certain clash of interpretation of what is the primary function, but the one given by my hon. Friend is certainly not what I would envisage as the primary function of nationalised industry. [HON. MEMBERS: "Oh."] I am sorry, but my hon. Friend asked the question, and I am giving him the answer. I think that this is mainly a role to be played by the Chancellor of the Exchequer and the Department of Health and Social Security.

Mr. Hannan: Is my hon. Friend aware that the charge for electricity to domestic consumers in Scotland is less than the charge of all other area boards and that this is very much appreciated in Scotland?

Mr. Williams: I am grateful for some supporting information.

New Power Stations

Mr. Edwin Wainwright: asked the Minister of Technology how many applications his Department has received from the Central Electricity Generating Board to build new power stations; what kind of fuel is to be used; and what kind he

has authorised to be included in the next building programme.

Mr. Alan Williams: Applications under consideration at 31st March, 1969, were listed in the Minister of Power's Report (House of Commons Paper 429). Since then the C.E.G.B. has applied for consent for a nuclear power station at Connah's Quay. The C.E.G.B. has recently been given consent for A.G.R. stations at Heysham and Sizewell B and an oil-fired station on the Isle of Grain; it will also be constructing the second half of the Drax coal-fired station, for which it already has consent.

Mr. Wainwright: Will my hon. Friend accept that the mining industry welcomes the decision that the Drax power station should be coal-fired, and will he give consideration to replacing old-fashioned coal-fired power stations by new coal-fired stations so as to ensure that the mining industry and supplies of coal shall not be reduced?

Mr. Williams: I cannot preclude the possibility that there could be more coal-fired stations, but I cannot go beyond that at this stage. I am sure that the mining industry, as my hon. Friend has said, welcomes the fact that the Drax power station is the biggest single project undertaken by the C.E.G.B. and will mean 5,000 jobs for miners.

Mr. J. H. Osborn: Are sufficient power stations now under construction or in the pipeline to meet expected demands for 1975?

Mr. Williams: Yes.

Electricity (Magnox Reactors)

Mr. Lubbock: asked the Minister of Technology if he will make a statement about the measures being taken by the Central Electricity Generating Board to restore full power on Magnox reactors.

Mr. Alan Williams: I have nothing to add to the reply given to my hon. Friend the Member for Dunfermline Burghs (Mr. Adam Hunter) on 21st October, 1969.—[Vol. 788, c. 228–9.]

Mr. Lubbock: Can the hon. Gentleman say whether the Central Electricity Generating Board expects to overcome the oxidation problem and restore full


output at these stations; if so, by what means and by what date?

Mr. Williams: I wish that I could give the hon. Gentleman a full answer, but the Board is itself still carrying out its investigations. The hon. Gentleman will appreciate the intricacies of this, and until we have the Board's findings I cannot take the discussion much further ahead.

Mr. Palmer: Will my hon. Friend impress on the Central Electricity Generating Board the importance of great frankness in this matter, so that there is no adverse effect in the long run on the reputation of British reactors?

Mr. Williams: I am sure the hon. Gentleman is quite correct in the advice he offers.

Metric Quantities (Decimal Notation)

Mr. Lubbock: asked the Minister of Technology when he expects to receive the report of his Advisory Committee on Units of Measurement on the decimal marker to be used for metric quantities.

Mr. Alan Williams: Decimal notation for metric quantities is a standardisation problem; in this country it is a responsibility of the British Standards Institution and, worldwide, of the International Standards Organisation. If my right hon. Friend's Advisory Committee on Legal Units of Measurement has views on this matter, they will be put to B.S.I. to assist in the formulation of national and international recommendations.

Mr. Lubbock: Is not it true that the Advisory Committee on Units of Measurement is taking advice from industry and that this problem should be resolved on an a priori basis; on the basis that Continental industry already uses the comma, that it clearly delineates between metric and Imperial measures and is less likely to be confused with the dot notation in multiplication? Will the Minister kindly make a decision on this basis, so that the uncertainty may be ended and, in particular, new text books may be printed as soon as possible?

Mr. Williams: Our ambitions go far wider than the hon. Gentleman goes. Although the comma is used on the Continent, it is not the form which is used in many parts of the world. At this stage

we are trying to establish whether or not an international consensus on the comma or the dot can be achieved.

Concorde Aircraft

Mr. Sheldon: asked the Minister of Technology if he will make a statement on the progress of Concorde.

Mr. Dalyell: asked the Minister of Technology if he will make a statement on the latest cost estimates for Concorde.

Mr. Wall: asked the Minister of Technology if he will make a statement on the progress of the Concorde programme.

Mr. Ellis: asked the Minister of Technology (1) if he will make a statement on the progress to date and the forward programme of the Concorde project;
(2) when he will make his revised estimates on the cost of the Concorde project available.

Mr. Benn: The two Concorde prototypes have now completed 135 hours of flight testing. Prototype 001 first flew at supersonic speed on 1st October. Prototype 002 is at present undergoing a planned programme of modifications in preparation for flight test at cruising speed and will resume flying early in the New Year. The results of flight tests so far have been satisfactory.
The latest agreed Anglo-French estimate of development costs is £730 million at January, 1969, prices. This is currently being reviewed to take account of the devaluation of the franc and certain adjustments to the programme.
I will inform the House as soon as practicable of the results of this review.

Mr. Sheldon: Since this means that once again the cost of the Concorde is going up yet further, will my right hon. Friend give an assurance that, before any more prototype models or pre-production models are instigated or any further costs are incurred, he will make a statement to the House?

Mr. Benn: The programme is under continual review. As the House knows, I went to Paris to see M. Mondon in September, and he will be coming over for a further meeting in December.
During the months that lie ahead, as the tests reach their critical stage in the sense that we shall be able to assess them, it will be necessary for us to balance, on the one hand, the need not to lose impetus for the programme and, on the other hand, not to commit too many resources until we know whether or not the aircraft will be the success we think it will be.

Mr. Dalyell: Is my right hon. Friend aware that many of us, whatever may have been our thoughts about the original Concorde estimates, agree with him on the issue of impetus. and hope that talk of cancellations will be kept to a minimum, as we should like to continue the project?

Mr. Benn: I have never spoken of cancellations although I have often been asked about them. I have tried to make it clear that the Concorde will develop its future according to the orders which are received for it from the airlines, and during this period of assessment I hope that the House will show some understanding and support for the biggest international project ever undertaken in the world and one of great importance to this country.

Mr. Ellis: Does my right hon. Friend accept that the livelihood of many people is at stake in the success of this project, and will he say when he will make the crucial evaluation he spoke of and give the green light to go ahead with the production model?

Mr. Benn: My hon. Friend knows that authorisations for production expenditure have been given, subject to the point which I have just made, and the Concorde's success will be assured when the orders are firm and production aircraft are being made for a customer.

Mr. Corfield: Will the right hon. Gentleman bear in mind that one can also add to the cost of Concorde by delay in giving the go-ahead for the next stage?

Mr. Benn: This is the balance which must be struck during the months that lie ahead. I think the hon. Gentleman and I see this in the same way.

Mr. Rankin: Will my right hon. Friend keep in mind that the cost element has from the beginning been part and parcel of the propaganda launched against

Concorde, and will he assure us that when we come near to success he will not look back?

Mr. Benn: I understand what my hon. Friend is saying to me, but I cannot apologise to the House for keeping an eye on the cost. It is not my money that is being spent; it belongs to the taxpayer; and I am bound to balance up the estimated development cost against the estimated return on this investment. and I have done this in such a way,I hope, as not to shake people's confidence in the prospects of success.

Sir A. V. Harvey:: Assuming that the tests continue satisfactorily, can the right hon. Gentleman say what progress is being made in cut metal for production to assure early delivery when that time comes?

Mr. Benn: This is the balance which must be struck in consultation with the French, who have been reviewing this matter themselves as well as with us. But, as I have just said, and as the hon. Gentleman knows very well, production expenditure has been authorised and metal has been cut. There is a Question on the Order Paper later about the production programme. However, as I think he knows, some further authorisation is now forthcoming.

Advance Factories, Scotland

Mr. Bruce-Gardyne: asked the Minister of Technology what is the total number of male and female jobs, respectively, currently resulting from the establishment of advance factories allocated to Scotland in programmes announced since October, 1964; what has been the total cost of such factories to public funds to date; how many of them are currently untenanted; and what is the longest period of time for which a factory has been standing completed and unlet.

Mr. Varley: 55 Ministry of Technology advance factories have been authorised in Scotland since October, 1964. 43 of these have been completed and 32 have been allocated. Employment at present provided in these factories totals 2,830–1.080 men and 1,750 women. Many of these factories have still to recruit all the labour they will need. Up to 30th September, 1969.


expenditure—excluding cost of land—totalled £4,182,000. The longest period during which a factory has been vacant is three years.

Mr. Bruce-Gardyne: I am grateful to the hon. Gentleman for that comprehensive reply. Could he tell the House what his predecessor at the Board of Trade never seemed able to tell the House, namely, the precise cost to public funds of each male job so far created in these factories?

Mr. Varley: I am afraid that I cannot. It is not possible to say what the average cost per job is.

Mr. James Hamilton: Would my hon. Friend remind the House that when these firms go to development areas they employ only a relatively small number of people? As an instance, Honeywells started with 60 people and now employ close on 6.000 people in my constituency.

Mr. Varley: I am grateful for that information.

Marine Technology

Mr. Dalyell: asked the Minister of Technology what proposals he has for participating in the development of the marine environment; and if he will make a statement.

Mr. Carmichael: The Department provides the chairman and a member of the interdepartmental Advisory Committee on Marine Technology which has been charged with this duty. A report on its first year's activities is shortly to be published.

Mr. Dalyell: What is meant by "shortly"?

Mr. Carmichael: The report is being printed and it is hoped that it will be published towards the end of this month and that there will be a Press conference to launch the report.

Upper Clyde Shipbuilders Ltd.

Mr. Edward M. Taylor: asked the Minister of Technology if he will make a further statement on the position of Upper Clyde Shipbuilders.

Mr. Benn: Upper Clyde Shipbuilders Limited has received the financial assistance recommended for it in June by the

Shipbuilding Industry Board, which continues to keep in close touch with the company.

Mr. Taylor: Would the right hon. Gentleman agree that the best way to squash the ill-founded and mischievous rumours circulating last week about the continued survival of Upper Clyde Shipbuilders would be for the firm to obtain some new orders? Would the Shipbuilding Industry Board and his Ministry give every possible assistance to the company in its current search for new work?

Mr. Benn: I am sure that the ordering prospects for the company are improving, but I also think it best, as I have said in the past, not to encourage an atmosphere of crisis. The company, which has received this assistance, the board and ourselves are in continuing contact.

Mr. Small: Does my right hon. Friend recognise that Upper Clyde Shipbuilders has now established a degree of credibility and is in the market for further orders? I hope that it will be left alone so that it can get on with the job which the Government have helped it to perform.

Mr. Benn: I share that view.

Clydeside (Ore Terminal and Steelworks)

Mr. Edward M. Taylor: asked the Minister of Technology if he will make a further statement on the proposed ore terminal and steelworks on Clydeside.

Mr. Varley: On the question of the terminal, I have nothing to add to the reply which my right hon. Friend the then Minister of Power gave to my right hon. Friend the Member for Middlesbrough, East (Mr. Bottomley) on 11th July. The Corporation has said that it does not expect that an entirely new integrated steelworks will be required before 1975. —[Vol. 786, c. 337.]

Mr. Taylor: Does the hon. Gentleman still take the view that the Clyde has unique deep water advantages, and does he recall that on 11th July the Minister of State said that the negotiations between the British Steel Corporation and the Clyde port authority would be concluded before the end of the year?

Mr. Varley: On the last part of the supplementary question, I still take that


view, and the British Steel Corporation is well aware of the advantages of the Clyde.

BAC 3-11 Aircraft

Mr. Marten: asked the Minister of Technology if he will make a statement on the proposal for a BAC 3–11 aircraft.

Mr. Benn: The British Aircraft Corporation has continued to keep me informed of its progress in preliminary design studies and in discussions with airlines.

Mr. Marten: Can the right hon. Gentleman say how much launching aid is likely if the development of this aeroplane should go ahead, and what is the estimated in-service date if a decision is taken within, say, the next few months?

Mr. Benn: It would be wrong for me to anticipate the proposal to be brought forward by B.A.C., and I should have to consider whether this information was covered by commercial confidentiality. B.A.C. understands very well that it will have to produce its share of the cost and some assurance of a market. I am awaiting the full proposals from the Corporation with great eagerness.

Mr. Robert Howarth: Is my right hon. Friend aware of the impending decision by airlines such as B.E.A. and other European operators for an aircraft of this size? Does not this mean that it is urgent and that we must have a decision with regard to either this aircraft or the European airbus?

Mr. Benn: Yes, but eagerness for a decision does not necessarily mean that the decision is being delayed by the Government. I must make it absolutely clear that I have not had a firm proposal from B.A.C. on a basis on which it would be sensible or possible for me to adjudge on its request.

Black Arrow

Mr. Marten: asked the Minister of Technology if he will make a statement on progress with Black Arrow.

Mr. Carmichael: The next test firing of the Black Arrow satellite launcher is planned to take place from Woomera later this month. Work is well advanced in preparation for a further launch planned for 1970 and on the first utilisa

tion satellite due for launch in 1971. Further satellites, including one to carry a weather sensing experiment, are being studied.

Mr. Marten: Can the hon. Gentleman, first, confirm that there was no evidence of design fault in the last failure of Black Arrow and, secondly, say whether a study is being made of the cost and feasibility of Black Arrow being mounted on Blue Streak to give us an independent capability for commercial purposes?

Mr. Carmichael: I think that the hon. Gentleman received the Press statement which my right hon. Friend sent to him. There is nothing to add to that. There was no evidence of basic design failure. Should like more notice of the second part of the supplementary question.

Mr. Dalyell: As one who has had the good fortune to go to Woomera, may I ask whether the Ministry could make available places on the fortnightly Ministry of Technology plane to Woomera for Members of Parliament other than myself because it is important that hon. Members should see what is going on there?

Mr. Carmichael: That is a separate question, but I understand that that is precluded by the agreements which the Government have with the airlines.

Steel (Deliveries)

Sir G. Nabarro: asked the Minister of Technology if he will give a general direction with a view to improving steel deliveries to the constructional steel contractors, builders and similar enterprises and steel stock holders, in view of representations expressed in recent months by steel users and merchants with consequential resort to foreign steel.

Mr. Alan Williams: The Corporation has produced record amounts of constructional steels and imports have fallen; further increases in output depend on improving capacity rather than issuing directions.

Sir G. Nabarro: Why is it that Ministers in this House continue to whitewash the Corporation whereas all consumers of constructional steel and every other kind of steel are complaining about lengthening deliveries and poor service? Why is it that steel imports continue to rise if the


Steel Corporation is so utterly efficient, as Ministers wrongly allege?

Mr. Williams: In view of the strength of feeling which the hon. Gentleman says exists in the country, I am surprised to find that we have had fewer than 12 complaints on this matter. Also, it is difficult to see how the hon. Gentleman can reconcile some of the other points which he has made with the fact that this year imports have fallen by over 25 per cent. and that the British Steel Corporation's output has reached record levels, being 180,000 tons higher than last year. Far from whitewashing the Corporation, it is the private sector which for the last 21 years has not expanded its output of these steels at all.

Mr. Ronald Atkins: Would my hon Friend agree that the chief reason why we have to import steel is that for 10 to 15 years the private enterprise steel industry did not plan for sufficient capacity?

Mr. Williams: In addition to my hon. Friend's point, it is important to bear in mind that the steel industry exports twice as much, in terms of value, as it imports. Last year's favourable balance of payments on steel was £133 million.

Sir J. Eden: Could the hon. Gentleman inform the House about the special position of nickel-bearing steel and what measures are being taken to help in the present crisis?

Mr. Williams: I am sure that the hon. Gentleman realises that this matter is out of the Government's control, being a problem arising in another country. Many consumers may find, if they contact the Corporation, that there are available substitutes which they have never considered in the past.

Thames (Pollution)

Mr. Gresham Cooke: asked the Minister of Technology if he will now make a statement on the discussions between the Central Electricity Generating Board and interested parties on the pollution of the Thames and the experimental suspension of gas washing in relation to the conditions imposed on the power station in 1927 and 1937.

Mr. Alan Williams: The Central Electricity Generating Board recently put a proposal to my right hon. Friend to dis

continue flue gas washing at Battersea "B" generating station for an experimental period of two years, and this is being considered. Meantime a temporary suspension is in operation to deal with emergency conditions in the Thames.

Mr. Gresham Cooke: Will the hon. Gentleman ask his right hon. Friend to bear in mind that the gas washing at Battersea Power Station adds to the pollution of the Thames and that the regulations under which the gas washing takes place date back as far as 1926, so that it would now be appropriate, 40 years later, to examine the situation and try to get new regulations to prevent pollution of the Thames and to lay down rules for gas washing?

Mr. Williams: I am glad to find one hon. Member opposite who reflects our modernising zeal.

North Sea and Irish Sea (Exploration Licences)

Mr. J. H. Osborn: asked the Minister of Technology whether he is satisfied that the conditions governing applications by January, 1970, for licences in new areas of the North Sea and Irish Sea are such as to ensure an adequate exploration effort; and if he will make a statement.

Mr. Benn: Yes, Sir; I have nothing to add to the information given by my right hon. Friend the then Minister of Power on 23rd July.—[Vol. 787, c. 1734.]

Mr. Osborn: Has the Minister had time to assess the impact of the conditions of independent companies working with nationalised industries being favoured and proposals in the Queen's Speech concerning international oil companies? Is the Minister satisfied that this will not hold back oil and natural gas exploration rather than encourage it?

Mr. Benn: There are many grounds for confidence that that is not likely to happen, one of which is that the geological prospects for the area will determine the interests of the companies rather more than any other factor. I believe that my right hon. Friend got the balance right in his announcement during the summer and we are looking forward to the applications, which are now being invited and will be assessed by early next year.

Industrial Development

Mr. J. H. Osborn: asked the Minister of Technology what information, and in what form, he proposes to circulate to industry outlining the advantages of industrial development in both intermediate areas, particularly in Yorkshire and Humberside as well as in the development areas in the north of England; and if he will summarise what is available in the OFFICIAL REPORT.

Mr. Varley: The Government have already announced the advantages and are giving them publicity but, with permission, I will circulate a summary in the OFFICIAL REPORT.

Mr. Osborn: In welcoming the fact that there is to be publicity, may I ask the hon. Gentleman that care should be taken to publish this widely to industry so as to make it possible readily to assess the advantages and disadvantages of going into the different types of industrial area, including intermediate areas?

Mr. Varley: I can agree with that supplementary question. We will give as much publicity as possible.

Mr. Edwin Wainwright: Will my hon. Friend take into account that in South Yorkshire, because of the rundown of manpower in the mining industry, there are not the jobs which should be there? Will he use whatever powers he has with other Ministers to ensure that new jobs and industries are introduced into South Yorkshire?

Mr. Varley: The Local Employment Bill which is at present before the House is designed to meet exactly the problem which my hon. Friend raises.
Following is the summary:
Financial Assistance in the Development and Intermediate Areas


The following forms of special financial assistance are available to industry in the development areas:—
(i) Investment grants at a rate of 40 per cent. (20 per cent. elsewhere) of new plant and machinery provided for use in a qualifying process;
(ii) Regional employment premium (30s. per week for each full-time male worker);
(iii) Training assistance from the Department of Employment and Productivity in the form of grants towards on-the-job training costs and by the provision of training courses;

(iv) Assistance from the Department of Employment and Productivity towards the transfer of key workers;
(v) The following incentives are available under the Local Employment Acts:
(a) Ministry of Technology factories for rent or sale (in the case of certain projects new to the development areas the first two years may be rent free);
(b) building grants at a rate of 25 per cent. of eligible costs to firms building and occupying a factory or an extension, or buying a building not previously occupied. In the case of certain projects new to the development areas, the rate of grant may be 35 per cent.;
(c) loans at moderate rates of interest;
(d) removal grants towards certain costs incurred in transferring an undertaking to a development area.
On 14th November, 1967, the President of the Board of Trade announced that additional assistance would be available in areas likely to be particularly affected by colliery closures (the special development areas). These extra incentives, which are available only to new projects setting up for the first time in a special development area include:
(e) Rent free periods of up to five years in Ministry of Technology factories;
(f) Operational grants at a rate of 10 per cent. per annum of cumulative expenditure on buildings and plant and machinery (net of investment and building grants) in each of the first three years of operation of a project in the special development areas;
(g) Loans towards the balance of building costs (not available elsewhere in the development areas).
In exercising its powers under the Local Employment Acts the Ministry is required to have regard to the relationship between the expenditure involved and the employment likely to be provided, and to any consequential effects on employment elsewhere in the development areas.
The amounts, terms and conditions of loans under the Local Employment Acts, and of removal grants and operational grants, are recommended by the Ministry's statutory Advisory Committee, an independent Committee of business and professional men. The Committee also examines applications for building grants, involving building costs of over £10,000. Before making a favourable recommendation, the Committee has to he satisfied that there are good prospects that the undertaking seeking assistance will be successful. Applicants for loan assistance are expected themselves to provide a reasonable proportion of the finance for a project.
Assistance under the Local Employment Acts is directed primarily towards manufacturing industry. Since 31st August, 1968, assistance has not been available for projects in the service industries (with the exception of projects which bring into the development areas at least 50 additional jobs)
Under the provisions of the Local Employment Bill, which is at present before the House. the Ministry of Technology and the Department of Employment and Productivity will be able to make available in the intermediate areas certain assistance already available to industry in the development areas. Subject to the passage of the Bill through Parliament, it is intended that the following incentives will be available in the intermediate areas on the same basis as in the development areas:—

(i) Training assistance from the D.E.P. ((iii) above);
(ii) Assistance from the D.E.P. for key workers ((iv) above);
(iii) Ministry of Technology factories for rent or sale ((v)(a) above);
(iv) Building grants at a rate of 25 per cent. (in some cases 35 per cent.) of eligible building costs ((v)(b) above).

Steel (Home Sales)

Mr. Emery: asked the Minister of Technology if he will give a general direction to the British Steel Corporation to renegotiate the terms of the new conditions of contract for home sales recently constituted by the Corporation with the private and nationalised industries concerned in the light of the representations he has received on the subject; and whether he will make a statement.

Mr. Alan Williams: No, Sir. This is a matter within the British Steel Corporation's own management responsibility, subject to consultations with the Iron and Steel Consumers' Council which, I understand, are nearing completion.

Mr. Emery: Will the Minister say, first, whether the nationalised industries have approached him about the way they feel that these terms of contracts are wrong? Secondly, did he consider that it was consultation for the British Steel Corporation to notify the Iron and Steel Consumers' Council and publish the terms before there was any discussion? Surely, that is the action of a massive mono-politic monster which was bound to bring bad will to customers.

Mr. Williams: I am at a loss to understand the hon. Member's concern on the last point since, to the best of my knowledge, as was pointed out to him in a letter, the consultative council was told two months before publication—

Mr. Emery: There were no negotiations.

Mr. Williams: It was open to the council to make representations and it was told two months in advance. I can legitimately ask the hon. Member what could be more reasonable than that.

Mr. Speaker: Mr. Emery, Question No. 35.

Mr. Emery: I was asked a question, Mr. Speaker, and I should like to answer—

Mr. Speaker: Order. Question No. 35.

Natural Gas

Mr. Emery: asked the Minister of Technology what percentage of the 4,000 million cubic feet per day of natural gas projected in the power policy statement for 1975 is now under contract; how much more is under negotiation; and what figure he estimates will be available from British sources by 1975 and 1978.

Mr. Benn: Contracts already signed should provide about 3 billion cubic feet per day by 1975. Contracts under negotiation should give at least another 0·7 billion cubic feet per day. I am confident that not less than 4 billion cubic feet per day will be available by 1975 or soon after.

Mr. Emery: In thanking the Minister for that reply, may I ask him to consider that it is not the geological prospects, as he mentioned in an earlier Answer. which will determine the interests of people for new licences, but their ability to sell the gas in this country? What review, therefore, has he in mind above the 4,000 million cubic feet per day level so that people can be assured that if gas is discovered, it will be possible for it to be marketed?

Mr. Benn: The marketing question was not included on the Order Paper but is obviously highly relevant. I have no reason to believe that the marketing a'pects will create difficulty, but if the hon. Member has any reason to believe that that is the case, perhaps he will put it to me.

Mr. Lubbock: Is the right hon. Gentleman aware that contrary to the fears expressed by the hon. Member for Finchley (Mrs. Thatcher) when acting as Opposition "shadow" spokesman on power, not only will there be 4,000 million


cubic feet a day by 1975, but the Gas Council will have much more than that at its disposal? There will be no difficulty in marketing it in the period from 1975 to 1980, when at least double this quantity will be sold. Will the right hon. Gentleman in future kindly express these quantities in cubic metres rather than in cubic feet?

Mr. Benn: I am so grateful to the hon. Member for what he has said that I should like to circulate him with the
OFFICIAL REPORT.

Advanced Gas-Cooled Reactors

Mr. Patrick McNair-Wilson: asked the Minister of Technology if he will give details of the number of inquiries which have been received for the supply of advanced gas-cooled reactors to other countries.

Mr. Alan Williams: At the present time, five countries have reasonably firm nuclear power projects, of a size for which the A.G.R. system would be suitable, and the nuclear design and construction companies are in touch. In addition, licences for the A.G.R. have been taken out by German and Japanese firms.

Mr. McNair-Wilson: While I welcome what the hon. Gentleman has told us about these inquiries, may I ask whether he would not agree that the sales of British reactors in the past have been extremely disappointing? Can he possibly give any reasons for this failure to sell abroad?

Mr. Williams: I quite agree with the hon. Member that sales in the past have been disappointing, and we hope for better in the future. It is for this reason that we have reorganised the selling side of the industry.

Shipbuilding Industry

Mr. Willey: asked the Minister of Technology what is the total net amount of the guarantees recommended by the Shipbuilding Industry Board under Section 7 of the Shipbuilding Industry Act, 1967.

Mr. David Price: asked the Minister of Technology how far the £400 million made available under Section (1) of the Shipbuilding Industry Act, 1967, as

guarantees to aid the financing of shipbuilding in the United Kingdom is now committed and whether he proposes to introduce amending legislation to raise the financial ceiling for the aforesaid guarantees.

Mr. Benn: The outstanding liability on guarantees issued or offered is about £335 million. In addition, other applications have been received and I am considering the position in the light of this.

Mr. Willey: As this has proved the cheapest and most effective way of helping shipbuilding, will my right hon. Friend give it favourable consideration and introduce amending legislation as soon as he can?

Mr. Benn: I shall certainly bear in mind what my right hon. Friend has said. This was intended to be a revolving fund, but it has not yet had time to start revolving.

Mr. David Price: Will the Minister bear in mind that I warned him and all his Ministers that if the British shipbuilding industry was to achieve the Geddes target of 2½ million compensated tons a year, the credit scheme would peak well above £400 million, but his junior Minister flatly refused to believe me? I have been proved right.

Mr. Benn: 1 accept that on the two occasions we have discussed this matter, the hon. Member said that Government policy would be so successful that it would be necessary for the position to be looked at again.

Mr. Willey: asked the Minister of Technology whether he will make a statement on the study of productivity being initiated by the Shipbuilding Industry Board.

Mr. Benn: The Shipbuilding and Ship Repairing Council has now set up a productivity sub-committee consisting of a member of the board with a representative each of management and unions.

Mr. Willey: As the board expressed disturbance and disappointment about the competitive position of the industry, will my right hon. Friend encourage the board to press this ahead as quickly as it can, because this is essential for the industry to hold its own against world competition?

Mr. Benn: I appreciate that. The committee has been set up with agreed terms of reference and work will be set in hand as soon as possible

G.E.C. / English Electric Company Board

Mr. Atkinson: asked the Minister of Technology what are the duties and functions of the Government's representative on the board of the General Electric Company/English Electric Company.

Mr. Benn: There is no Government representative on the board of the General Electric and English Electric Companies Limited. The Industrial Reorganisation Corporation has an option to nominate a director but has not so far exercised it.

Mr. Atkinson: Is not this an unsatisfactory position in view of the number of questions which are put to Ministers and Members of Parliament by trade unionists on matters concerning redundancy, factory closure, manufacturing policy and other matters? In the absence of a representative, how is it possible for these questions to be debated by the board? We are now informed by Mr. Weinstock that many of these important questions have not been before the board.

Mr. Benn: I think that my hon. Friend is under a misapprehension. Even when there is a Government director, I deal not with the company through him but direct with the chairman, which is the right way of dealing with the matter. On these questions of redundancy and other matters, I have, naturally, always dealt direct with the head of the company.

Sir G. Nabarro: Will the Minister resist all blandishments from behind him to enlarge policies involving "Meddlesome Matty" tactics by trade unionists or others?

Mr. Benn: I do not regard concern by trade unionists about their future employment as being messy or meddling. They are neither meddlesome nor interfering. They are the legitimate concern of people who might be affected by technological change. The hon. Member's representations to me could hardly be called blandishments.

LOCAL EMPLOYMENT BILL (MEMBER'S SPEECH)

Mr. Albu: On a point of order. Last week, during the debate on Second Reading of the Local Employment Bill, the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) referred to me and said that when I left office I made an attack on the Government's regional policies as being wasteful and ineffective.
I have never said anything of the sort. I have always supported the Government's regional policies, and, to be fair to the hon. and learned Member, he has admitted that I have not attacked Government policy.

Mr. Speaker: Order. We cannot go back over previous debates.

Mr. Fletcher-Cooke: On a point of order. Since there seems to be a sort of attack upon me and on my speech perhaps I may be allowed to say that in withdrawing the word "attack" I substitute the word "criticism" and that, in my view, the hon. Gentleman quite clearly criticised the policy of his former Department and his Government when he made a speech after he had resigned.

Mr. Speaker: The House will see how wise I was in saying that it is not in order to rehash debates. We cannot go over this now.

PARLIAMENTARY PAPERS (SUPPLY)

Mr. Boyd-Carpenter: On a point of order. May I ask whether we are to have a statement today on the continuing and worsening situation in respect of the supply of Parliamentary Papers? We all very much appreciate the heroic efforts of the Vote Office staff to produce this document, without which we could not function at all, but it contains no notice of future business. There has been, I understand, no new issue of the Order Book since Thursday. This is causing very real difficulties.
May I ask the Leader of the House, now that he is here, whether he will make a statement on what steps, after this long interference with the normal working of Parliament, are being taken to enable us to do our duty properly?

Mr. Speaker: I am glad that the right hon. Gentleman has paid tribute to the Vote Office and Table Office for the way in which they are trying to cope with a very, very difficult situation. I have had no request from the Leader of the House to make a statement on this matter.

The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): The right hon. Gentleman is quite right. This is of great concern. Many of our colleagues in the House have been working very hard on this matter, which concerns an industrial dispute. I will keep the House informed. I will, if necessary, have a statement made tomorrow.

ROYAL FAMILY (CIVIL LIST)

Mr. English: I wish to raise a matter of which, through the Clerk's Department, I have given you notice, Mr. Speaker.
I desire to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter which should have urgent consideration, namely,
 whether Her Majesty's Government advised His Royal Highness Prince Philip to make the statement he made in the United States regarding the Civil List, or were informed in advance of it, and whether they propose to introduce legislation to amend the Civil List Act, 1952, or to amend the Finance Act so as to subject Her Majesty to taxation.
I think that the matter is clearly specific, and that it is important is, I would suggest, made obvious by the fact that it has been referred to publicly by Front Benchers in the House as well as by the person mentioned in my proposed Motion. That it is urgent was stated, I think, by His Royal Highness himself, in the television broadcast.

Mr. Speaker: The hon. Member for Nottingham, West (Mr. English) was courteous enough to inform me this morning that he would make this application under Standing Order No. 9 this afternoon.
The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter which he thinks should have urgent consideration, namely,

 whether Her Majesty's Government advised His Royal Highness Prince Philip to make the statement he made in the United States regarding the Civil List, or were informed in advance of it, and whether they propose to introduce legislation to amend the Civil List Act, 1952, or to amend the Finance Act so as to subject Her Majesty to taxation.
As the House knows, under the revised Standing Order No. 9 I am directed to take into account the several factors set out in the Standing Order but to give no reason for my decision.
I have listened to the hon. Member and have given careful consideration to the representations he has made, and to what I have read and heard; but I have to rule that the hon. Member's submission does not fall within the provisions of the revised Standing Order, and, therefore, I cannot submit his application to the House.

BILLS PRESENTED LOCAL AUTHORITIES (GOODS AND SERVICES)

Mr. Anthony Greenwood, supported by Mr. Secretary Ross, Mr. Secretary Thomas, Mr. John Diamond, Mr. Dennis Howell, Mr. Reginald Freeson, and Mr. Arthur Skeffington presented a Bill to make further provision with respect to the supply of goods and services by local authorities to certain public bodies, and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 16.]

INDUSTRIAL DEVELOPMENT (SHIPS)

Mr. Anthony Wedgwood Benn, supported by Mr. Roy Mason, Mr. Secretary Ross, Mr. Secretary Thomas, Mr. Dick Taverne, and Mr. Eric G. Varley presented a Bill to restrict the power of the Minister of Technology to make grants under section 5(1) of the Industrial Development Act 1966 and enable the Parliament of Northern Ireland to restrict by reference to certain matters, the power of the Ministry of Commerce for Northern Ireland to make grants under section 6(1) of the Industrial Development (General Assistance) Act (Northern Ireland) 1966: And the same was read the First time; to be read a Second time tomorrow and to be printed. [Bill 15.]

Orders of the Day — GENERAL RATE BILL

Order for Second Reading read.

3.35 p.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Arthur Skeffington): I beg to move, That the Bill be now read a Second time.
I think that I can be a little more enthusiastic about this Measure than was Mr. Harold Macmillan, when he introduced the Valuation for Rating Bill of 1953 and said:
 I tell the House quite frankly that no one more dislikes the necessity for introducing this Bill than I do. Ministers, unless very young or very innocent, dislike introducing Bills. They are a great source of trouble and worry and interfere terribly with the proper job of the Minister which, in my view, is administrative and not legislative."—[OFFICIAL REPORT, 21st May, 1953; Vol. 515, c. 2378.]
I do not think that the Bill before us today will arouse strong feelings on either side of the House. Indeed, looking at it I think one would come to the view that there never was such a short, modest rating Bill introduced by anyone on any other occasion.
It has one simple point, which is in Clause 1, which goes to the matter of evidence of the kind which may be adduced in connection with the valution of dwelling-houses. It concerns only dwelling-houses. It makes no other change whatsoever in the law. It does not in any way alter the definitions; it does not alter the formula in Section 19 of the General Rate Act, 1967, the Consolidating Act. It takes away no rights of any of the parties or of the valuation officer.
If the House is good enough to give the Bill a Second Reading the fact that additional evidence can be adduced by the valuation officers will, of course, be open equally to all the other parties in rating proceedings whether they are owner-occupiers, tenants, or the local authorities. So, it makes a very minor change indeed. I emphasise that so that there should be no alarm, no dismay, and also because I need not embark upon any long-ranging, comprehensive survey of the rating system which, I imagine

in any event would be out of order, because of the very narrow scope of the Bill.
As the scope of the Bill is so narrow that it is directed to adding one small subsection to Section 19 of the General Rate Act, 1967, I think that the House is entitled to have answers to two questions; first, why is it necessary to make this decision now; and, secondly, why is it necessary to enlarge the scope of the evidence?
The definition of the valuation of dwelling-houses is contained in Section 19 of the Act to which I have referred. There are two elements, the gross value and the net value. The gross value is defined in subsection (6) in the following terms:
gross value in relation to a hereditament. means the rate at which the hereditament might reasonably be expected to be let from year to year if the tenant undertook to pay all usual tenant's rates and taxes and the landlord undertook to bear the cost of the repairs and insurance and the other expenses, if any, necessary to maintain the hereditament in a state to command that rent.
The net value is obtained by taking from the gross value a proportion of rent which is specified from time to time by the Minister and which is intended to cover the actual expenses of repair and other contingent expenses of that kind which, for the purpose of dwelling-houses only—this does not apply to other hereditaments in the rating law—are considered to be the landlord's responsibility.
That is how the gross value and the resulting net value are determined in accordance with statute. Although even that concept is not the easiest to work out in practice, as innumerable cases indicate, nevertheless the difficulties, I think, have been very well understood. A difficulty has arisen over the years, however, and is now assuming considerable proportions for valuation officers and all others who work in this field. The best rating evidence, apart from other evidence which has to be weighed by the valuation court and the Lands Tribunal, is always held to be evidence of actual rents in the market negotiated between landlord and tenant.
The trouble is that actual reliable evidence of transactions of this kind where rents are negotiated freely in the market is becoming extremely rare. This is not


difficult to understand when one realises that about 50 per cent. of all dwelling-houses in England and Wales—as will be seen from Clause 2, the Bill does not apply to Scotland and Northern Ireland —are now owner-occupied.
About a quarter of the remaining half are publicly-owned houses of one kind or another where other factors beside that of the market may determine the rent. Of the remaining quarter a very large proportion indeed are subject to some form of statutory control and, therefore, again one does not get the free market rent.
I have discussed this with some valuation officers over the years. They find it extremely difficult when they are compiling their lists in five years, or, as the House may specify, to get the best evidence which some courts have always interpreted as the only evidence on which they can determine the valuations in question. It is true that the valuation officer has always, in practice—the courts have recognised this-had some discretion to go a little more widely than his immediate locality.
I do not think that he is barred by Statute from going anywhere, but obviously, if the valuation officer is in town A and town B is more than 100 miles away, the courts might attach little weight to the evidence he gives from town B. They may think that it is not comparable evidence in connection with the determination they are asked to make.
We are moving a little way away from the rigid rule—how far will depend on how much the valuation officer weighs his evidence: and the court will decide what weight to give to the evidence—but if the court interprets rigidly it may be that no evidence could be admitted. The valuation officer may be in the unfortunate position of not being able within his area to produce sufficient evidence. The courts have moved away to some extent from this rather rigid rule, in practice, of arguments about local houses of similar quality.
That very great judge who has done so much to clarify the law, and who is such a brilliant expositor of English law, the Master of the Rolls, Lord Denning, said only this year in the case of Garton v. Hunter:
 Nowadays, we do not confine ourselves to the best evidence. We admit all relevant

evidence. The goodness or badness of it goes only to weight and not to admissibility … 
The courts, therefore, are taking a more tolerant view.
However, it would not be good enough just at the time when work is commencing on the revaluation for 1973, to leave this matter either for the valuation office or, indeed, anyone else who wishes to comment or take part in proceedings, unresolved without giving some help. The general rule which would be observed in most valuation courts and by the Lands Tribunal for certain purposes would be to impose some restrictions if they felt they were not bound by evidence which might come from some distance away.
A further difficulty has arisen. There is reference in Clause 1 of the Bill to dwelling-houses of other descriptions. Over the years there have been complaints, not to put it too strongly, by some occupiers of dwellings that they are bearing an unfair burden of the rate, in comparison with those in other categories of property. We have seen this very much in the case of occupiers of fiats who sometimes, certainly in areas of London and other big cities, feel that their valuation is disproportionately high compared with similar types of accommodation in houses. This has often been expressed too by occupiers of bungalows.
It has been an invariable rule of practice, always carried out by the Lands Tribunal, that if one is discussing the valuation of flats the valuation officer or anyone else is not entitled to bring in for comparison or comment the valuation of ordinary dwelling-houses. This would appear to be wrong. Therefore, Clause 1 of the Bill provides that in future it will be possible to bring into a valuation, possibly in argument, other types of property.
I am not saying, still less promising, that occupiers of flats will suddenly find that their valuations will go downward. All I am saying is that it seems to us—and expert opinion is fully behind this decision—that the time has now arrived in reaching valuations for all types of accommodation to be considered and contrasted. We feel that this is reasonable.
The way in which this will be done obviously will be a matter for argument before the tribunal before which the matter is contested. A tribunal will not


say that every flat of a certain cubic dimension is to be valued at a certain figure and that, therefore, a house of double that dimension will be double that valuation, or vice versa. The basis will still depend on an assessment of individual properties. The normal basic rule will remain that each hereditament will be valued, but it will be possible in argument for reference to be made to other comparable properties.
This is all that Clause 1 provides. It enables the valuation officer and anyone else to look much more widely than hitherto they have thought right to do, without risk of their evidence being rejected by the court as inadmissible; it also enables all types of dwelling to be brought into the argument.
The second question that might be asked is why the Measure is required now. Because of the narrowness of the Bill, I am precluded from any wide-ranging discussion of rating systems—

Mr. Michael English: (Nottingham, West): Is that last statement correct? Is it not possible for my hon. Friend the Parliamentary Secretary to refer to matters outside the scope of the Bill?

Mr. Speaker: The hon. Gentleman himself twice put correctly the answer to this point of order. On this Bill we are not discussing the major Bill to which this is an addition, except in so far as it arises out of this Bill.

Mr. Skeffington: I was trying to avoid the need to embark upon a wide description. But I should tell the House, since it is relevant, why the Bill is required at this moment in advance of action on the Royal Commission's recommendations, and why a wholesale rating Measure is not being brought before the House at this time.
The urgency of the Bill arises in connection with the 1973 revaluation. The House, in 1966, agreed that the revaluation which should have taken place in 1968 should be postponed to 1973. The valuers are about to begin on the massive task which will occupy them for a number of years. If, when compiling their lists, valuers were in doubt about evidence to be put before the court, both in regard to proximity and other types of dwellings which could be considered, this not only would add considerably to the practical work of valuation but would mean that

they would be proceeding on an uncertain basis.
We have taken the best advice we can, both expert and lay, and, so far as I know, there is no objection to this very modest proposal. We feel that the Bill should be presented now so that valuation officers, rating surveyors and many others will know the quality of evidence which will be admitted and the other features which I have mentioned. That is the reason that the Bill is being presented now, in advance of any change which may follow any reorganisation of local government. I hope that the House will feel that the Bill should be given universal support.

3.55 p.m.

Mr. John M. Temple: (City of Chester): The Minister, in introducing the Bill, described it as modest. He took a liberty when he said that it took away no rights! I shall later explain to the House that it takes away from ratepayers considerable rights.
The hon. Gentleman also claimed that there had been no criticism of the Bill. Certainly, because little time has elapsed between its publication and Second Reading. The Bill, although small, is complicated and its effects will be fairly far-reaching. I inform the Minister of Housing and Local Government, whom I am glad to see in his place, that experts at provincial level have not been able to get their evidence to the centre so that it might be available, nor has this evidence been available to the associations which study these matters closely.
I forecast that considerable objection will be raised to the Bill, although nobody—certainly no hon. Member from this side of the House—would wish revaluation to be postponed beyond 1973. The postponement since 1963 has been long enough. I have heard various comments made by experts, one of whom described the Bill as a monster, and another described it as a mouse. I describe it as a tepid Bill. I am not fond of tepid things. Last night I stepped into a tepid bath and I did not like it. This is a tepid Bill which I do not tackle with enthusiasm.
The Minister could have gone a little further. We might have had a categoric guarantee that we were to have a revaluation in 1973. This is what all the experts outside wish to know. It is the


64,000 dollar question. Are we to have this revaluation? If we are to have a revaluation on a proper basis, then a little more than this tepid Bill is needed to put things in order.
The Minister was fair—and the Explanatory Memorandum is explicit—in saying that the underlying objective of the Bill is to ease the burden on the valuation office. But who put it there? Undoubtedly, it was put there by the Government with their decision to introduce the Land Commission. That is the real reason that the valuation officers are overloaded.
The Minister was wrong when he said that the Bill would take away no rights. I am afraid that ratepayers who lodge appeals will find themselves in the gravest difficulties. The Minister said that the valuation officer will be able to take into account values not only of houses but of flats and bungalows in the area of the rating authority as well as over a wide area of the country. I will go into more detail later since this is the heart of the Bill.
I am very chary of small print. When the Prime Minister says anything, I always watch for the qualification. When written statements are made, I watch for the asterisks! This is a small Bill, but I am just as careful about small Bills as I am about small print and asterisks!
There is no need for Parliament to turn itself into a bureaucrats' protection society. If we pass the Bill without qualifications and changes, that will be the effect. The bureaucrats will gain. They need to gain, of course, because they are in such difficulties. I do not criticise them in that respect. But we do not need to turn ourselves into a benefit society for them.
The Bill is extremely significant in that it underwrites the near-certainty that rates will continue as the major source of locally raised revenue. I find that interesting. I have always suspected that, at the end of the day, the year or the decade, that would still be the position. It would always be our intention that rates should be levied on as fair a basis as possible.
The Bill says that, for rating purposes, existing gross values can be taken into account as a basis for rating. I hope that the Minister will tell us whether capital

values can be taken into account as well. Surely there is a direct relationship between capital values and rentals. Capital values are better known throughout the property world than any hypothetical rent or rental evidence which may exist. The hon. Gentleman said that rental evidence is tenuous, and I agree with him.

Mr. Peter M. Jackson: Would not the hon. Gentleman agree that in some instance gross values do not always reflect rentals, in that there is a considerable disparity between the rateable values and hypothetical rentals of flats and of dwelling-houses?

Mr. Temple: I shall deal with that point in a moment. I think that the hon. Gentleman is a little confused.
As the Minister said, there is a direct relationship between gross values and net annual values, or rateable values as they are called. We on this side would like to see a fair basis for gross values. If we get gross values fixed on a proper basis, they will represent a magnificent yardstick for fixing fair rentals, and it is one which would have been used by a previous housing Minister had it been accurate. I think that that is the short answer to the hon. Gentleman.
Prior to the introduction of this Bill, the rating of dwelling-houses was essentially a local matter. Comparisons were restricted to the area of the rating authority. I see a danger arising from the much wider comparison which is suggested. No doubt the valuation office will be able to make it, but it will be very difficult for the ratepayer concerned to have regard to a miscellany of valuations on houses, flats and bungalows of different descriptions all over the country. The ratepayer will be at a distinct disadvantage, and rates will lose their identity as a local tax.
The Bill is less than a serious attempt to bring equity into the rating system before the next revaluation. I hope that it is attempting to do more than give the Inland Revenue an opportunity to revalue from an armchair on a formula basis. If the idea is to enable the Inland Revenue to use a multiplier in an office remote from the site, the Bill will be a disaster. I reply upon the Minister's words when he said that there will be an element of


inspection, but I hone that it will be more than just an element.
I will now deal with the specific aspects of the Bill. The first of them is the administrative difficulties. The second is the effect on domestic ratepayers, of whom there are a great many. The third is whether the proposed system is fair. The fourth is to ask why we have such a limited Bill. Then I shall have a few technical questions to raise.
Dealing with the administrative difficulties, no one under-estimates the great problems of the Valuation Office of the Board of Inland Revenue, and I wish to pay tribute to those in it. They have a remarkably heavy task at all times, and preparing for a revaluation is a mammoth one.
It is not without interest that the work of that office was examined by the Estimates Committee fairly recently. On Wednesday, 5th March of this year, Sub-Committee C of that Committee took evidence from the Chief Valuation Officer, Sir Douglas Iggulden, which was concerned directly with the position of the 1973 revaluation. At paragraph 300 he was asked:
Has the work yet been begun on the 1973 revaluation?
He replied:
We have not yet surfaced.
The public as yet are unaware of anything that we are doing towards a revaluation. We have to have something like 20 million forms prepared.
This is the first public appearance of the 1973 revaluation, and this Bill is preparing the way. There is no doubt that it is a formidable task, but we must ensure that ratepayers have a fair deal and, at the same time, that the administrative side has an easier run. The Bill is slightly weighted in favour of giving the Valuation Office an easier run. It is hoped to ease the extreme administrative difficulties, some of which have been caused by the actions of the present Government.
The Chief Valuation Officer's answers, in paragraphs 276 and 277 set the scene for the debate. Referring to valuers, he said:
We are well short of what we really need. Of course, we are short all over the country.

In an answer in paragraph 301, referring to the 1973 revaluation, he said:

This will be the third revaluation with which I have been concerned. I was never happy over the other two. I do not think I will be any happier over this one.
The Chief Valuation Officer was not happy during March of this year. I do not know whether this Bill will make him any happier.
Very much more needs to be done to the rating system than a mere tinkering with or adjustment in respect of domestic dwellings. The rating system raises an enormous amount of revenue, and we should seek to make it fair right across the board. It may be administratively difficult, but a great deal more could be done. The Minister and his Department are responsible for not doing it now.
Sir Douglas Iggulden told us why there was a postponement from 1968. The 10-year gap from 1963 to 1973 is far too long. In paragraph 310 Sir Douglas was specific about the reason. The question was:
How much work has been added by the Land Commission Act and what adjustments have you had to make? 
Sir Douglas's answer was:
 When the Land Commission Act first came into being, you will remember that we were excused doing a revaluation last year, in 1968.
The cat was out of the bag. The Land Commission Act was the prime cause for a revaluation not being brought about in 1968. I wonder what the Land Commission Act is doing now to the valuation office. I am afraid that it is making its task in all spheres very much more difficult—

Mr. Speaker: Order. A discreet mention of the Land Commission Act is permissible, but not a detailed debate on it now.

Mr. Temple: I was quoting the chief valuer. Those were his specific words in giving his reason for the postponement.
I leave that point. However, I think that I am allowed one more quotation on this theme, because it is the basis of my attack on this Measure. I refer to a learned professor, Professor A. R. Ilersic, who is so well known to what I may call all the "old boys" in this sphere. Professor Ilersic was the author of a pamphlet called "Rates", published by the


Institute of Municipal Treasurers and Accountants in February, 1969, so it is up to date. In that pamphlet he says:
The first need is to cut down the current waste of valuation resources involved in the working of the Land Commission and to ensure that all valuers work on preparing a new valuation list.
Again., administrative burden is the raison d'etre for this piece of legislation. Let there be no mistake about that. The Explanatory Memorandum mentions that the prime cause is to ease the administrative burden.
I have recollections going back over many years of how often the Labour Party wrecked sound systems and then said that they did not work. The rating system is perfectly good if it allowed to work properly, but it has never been allowed to function in the way that it might have done.
I now refer to the 20 million forms—part of the administrative burden—which the valuation office is sending out.
I noticed a short article in the Daily Mail on 3rd November which said:
 Warm up now, pay later.
This was referring to an aspect of the form which is being sent out on which a householder has to state all sorts of things including whether he has central heating installed in his house; not whether he is thinking of putting it in between now and 1978.
The reason I say 1978 is because these forms will not go out again before the 1978 revaluation. So that householders who are fortunate enough to receive a form now and have not got central heating will not need to tell anyone when they do have central heating, and they will thereby gain at the expense of all other ratepayers.
This is different from an alteration carried out as a result of planning permission, because the local authority sends a copy to the valuation office so that it is alerted. If a householder makes an alteration with a do-it-yourself kit and does not inform the valuation office, it will not know for five years—and in this case 10 years—that an alteration has taken place.
I make this point because there is no real alternative to a wide system of inspections by the valuation office. I do

not believe that any amount of form filling will bring the same results as inspections on a thorough basis.

Mr. English: I think that we all take the hon. Gentleman's point. But surely the form filling is irrelevant after what happened, for example, in the days before there was any planning permission. The principle of alterations to property only taking effect very often in practice, though not in theory, at the next valuation, has been going on for centuries.

Mr. Temple: What has not been going on for centuries is the enormous amount of added work which has been placed on the valuation office. In the old days the valuation office was able to perform its task in a proper manner without an enormous number of forms. I am frightened that this will be a bureaucrats banquet and that the valuation will be done on the basis of what is in the forms. I will explain more about this later.
I should like the Minister to tell us whether his Department will authorise local authority staffs and private firms of valuers on contract to help the valuation office. Without an immediate authorisation of this nature this task cannot possibly be done on an equitable basis.

Mr. Martin Maddan: I have not been lucky enough to receive such a form. May I ask what are the statutory penalties attaching to perhaps incomplete or erroneous fulfilment of it:? Does it have the status of an Inland Revenue form for income tax purposes?

Mr. Temple: Like my hon. Friend, I have not been favoured with one of these forms. It all goes to show just how inequitable the system is that my hon. Friend and I have not been favoured with these forms, but other householders throughout the country have.
I was drawing attention to the inequities. If my hon. Friend and I had installed central heating today we should have had to return this on the forms which we should no doubt complete tomorrow. But others who received these forms some weeks ago would be entitled to install central heating today and would not have to make any return at all.
On the other point raised by my hon. Friend, considerable penalties attach to


any misrepresentations or wrongful information given on these forms.
I have my doubts whether these new proposals are fair. First, this new system, as I call it, brings in a comparison of the value of dwelling-houses all over the country. I cannot understand why the valuation office want this power only in respect of dwelling-houses. There are many other spheres of rating, and I will mention one or two. What about the mixed hereditament, the shop and dwelling-house combined? It will not be permissible to compare the rentals of those all over the country.
What about commercial properties? I am not saying that it is necessarily a bad system. but if it is good—and I presume that the Government think that it is—why not extend it to all other kinds of property? Surely rental evidence is fairly difficult to find. Many specialist types of properties may not be in wide evidence in a particular rating area, but may be self-evident if we cast all over the country. I am merely asking why it is limited to dwelling-houses only.
Secondly, why mix up rental evidence of houses, flats and bungalows? The Minister, in introducing the Bill, said that flat owners might not expect their rateable values to go down. In that case, house owners will certainly expect their rateable values to go up, because there will no doubt be an equasion between the two categories.
Dealing with the second point first, the mix up of the rental evidence, I believe that this is the most serious matter with which we have to deal. The Minister made a certain calculation. I make a different calculation about the area of rental evidence which will exist. My calculation is based on the advice of Professor Ilersic. I do not think that he is wrong, and that is why I quote his figures. In England and Wales about half the dwellings are owner-occupied. There is no rental evidence there. One-third of the dwellings are council houses, so there is no genuine rental evidence there.
That leaves us with one-sixth of the domestic dwellings, and of those, about half, or perhaps slightly more than half, are subject to controlled rents of some kind or another. That means that there is evidence in the free rental market of

only about one-twelfth of the dwellings in this country. Of that one-twelfth, in London there is a high proportion of flats, and in the provinces there is a high proportion of houses.
I am making these points to indicate, that if, as the Government propose, we are going in for a pool basis for rental evidence, the pool will be extremely turgid and mixed up, and that when a ratepayer has to appeal against a pool of evidence he will have a mighty poor chance of succeeding against the valuation office.
Now I turn to the dangers to ratepayers of the wider comparison. At the moment, under the present system, a ratepayer can look round his own area for somewhat similar houses which are on a rack rental basis and then go to the valuation officer and say, "I want my valuation compared with, say, half a dozen houses which we can see comparatively locally". That is a comparatively easy comparison to make, both for the valuation officer and for the ratepayer. But under the new system, the "pool formula" basis as I call it, I do not think that the ratepayer will stand a chance. The valuation officer will be able to say, "Our valuation is on an amalgam of rents of houses, flats and bungalows drawn from a very much wider area". The poor ratepayer will be beaten before he starts. I believe that the ratepayer deserves a pair of braces, or even a belt, to hold up his trousers. The Bill will take away both his braces and his belt.

Mr. Skeffington: The hon. Gentleman said that under the present system a ratepayer can find half a dozen comparable houses and tender them as evidence. Nothing in the Bill will prevent him from doing that in the future. The hon. Gentleman will find that in Lands Tribunal cases time and again the ratepayer has wanted to go much wider than locally to get his comparison. It is the ratepayer who has as much interest in this as the valuation officer has.

Mr. Temple: I do not deny that under the new system the ratepayer will be able to pick out half a dozen houses, but the valuation officer will be able to say, "I have drawn my comparison over a very much wider area". There may be evidence of ratepayers wanting to make a comparison over a wider area, but ratepayers are normally relatively small


people who do not want to get involved in the enormous costs of an action, and, therefore, they will not be able to get all the evidence which the valuation office will readily have at its disposal. The position of the individual ratepayer will be seriously prejudiced by this system.

Mr. Skeffington: The court will always have regard to the weight of the evidence, and the best evidence, and if the ratepayer can produce six examples of local houses that will be by far the best evidence. The hon. Gentleman's argument is non-founded.

Mr. Temple: I do not agree with the hon. Gentleman. It has been suggested to me by outside experts that what will happen is that the valuation officer will say, "Very well. Your rateable value is all right. We will make proposals to bring the other six houses to a higher level", because that pool of evidence possibly will indicate that they should be on a higher level. That is how I understand the Bill, and I think that one or two of my hon. and right hon. Friends will say something about this matter.
Why is this such a limited Bill? What is required before the 1973 revaluation is fairness and clarity over a very wide area, and there is no doubt that the nationalised industries are getting off far too lightly in the area of rating at the present time. I mention particularly one glaring example, British Railways, which is known to the Minister. I mention also, because it was brought up at Question Time today, the tremendous strides which the Gas Board is making

Mr. Speaker: Order. The hon. Member is widening the debate too far, I think.

Mr. Temple: The purpose of the Bill is to make things fair and equitable, looking forward to the revaluation of 1973, and I think that I am entitled to make just a passing reference to these matters. Natural gas is being brought in, treated and purified. Because it is deemed to be a purification, it is not a "process", and, therefore, under rating law it is not rated as process plant.
How stupid can one get in this technological age, in this "white heat" about which the Prime Minister talks, if one cannot recognise the difference

between purification and processing and put it right in a Measure of this nature? I should like equity to be brought about in the whole field of rating law.
I said that I would deal with a few technical points. I propose to ask the Minister some questions directed to the technicalities of the Bill. Why should the valuation officer be permitted to base an assessment on the relationship between rents and gross values? Anyone would think that gross values had been achieved by an almighty wand, and that they were perfect. But, if one thought that, one would have to listen to the words of the then Minister of Housing and Local Government, now the Secretary of State for Social Services. I sometimes get rather mixed up with the shuffles in the Government hierarchy.
The right hon. Gentleman, when talking about gross values, said:
… in a really large minority of cases "—
he was talking about London—
 the rateable value is a positively misleading factor in relation to a house. Unfortunately, under the new valuations, it is reckoned that in some areas more than a quarter of the rateable values are unfair."—[OFFICIAL REPORT, 30th June, 1965; Vol. 715, c. 705.]
If gross values—and gross values are referred to in the Bill—were unfair then, they are unfair now, and yet the Government are taking power for the valuation officer to make a comparison between unfair gross values and present rents. What will be the advantage of a comparison? When the underlying basis is unfair, what is the value of the ultimate comparison? I believe that it is absolutely valueless, and that in this respect the Government have made a glaring error. Unless they can say that gross values now have a direct relativity to the value of property, there is no reason why they should claim that this comparison should be made.
If gross values had been accurate the then Minister of Housing and Local Government would have used them as a basis for fair rents. He would not have required a rent assessment to be made to achieve fair rentals. He could have used the gross values. That is what he said he would have liked to have used. Gross values as a yardstick are not accurate, and should not be perpetuated for purposes of comparison and as a basis for rental evidence.
There is a third technical point. Is in reasonable, when the basis of valuation of domestic properties is being changed to this extent, to allow the ratepayer only three months to object to his new valuation? For those hon. Members who are not familiar with all the provisions of the 1967 Act I draw attention to Section 67, which provides that such objections shall be made within the period of 1st January to 31st March, 1973. Given the basis of the extraordinary difficult comparison which the ratepayer will have to make, it is not fair to allow him only three months in which to lodge an objection—and I understand that the time can be cut down but not extended.
I want to make it clear on behalf of my right hon. and hon. Friends that we wish a revaluation to take place in 1973, but we want that revaluation to be fair to all ratepayers. The Bill deals with the domestic ratepayers. We do not want a form and formula job. We want valuations to be based on thorough in spections. I do not believe that any form can describe an environment. No form can adequately describe the effect upon properties of being on a flight path into Heathrow Airport, with aircraft flying overhead continually. No form can say whether a property has a beautiful vista, or a view over a sewerage works. Forms are quite inadequate as the bases for valuations of houses.
Furthermore, on the basis of formulae, is it possible to value a house purely on the number of super feet, the area of window space and the number of electric light points? No. There is much more to the valuation of property than the evaluation of all those factors. The factor of prime importance in the valuation of a domestic dwelling is the desirability of that dwelling. Nothing but an individual inspection can safeguard ratepayers and make them feel that they will get a just deal. I have described the Bill as a bureaucrat's benefit. It has been made necessary by the Land Commission. The domestic ratepayers deserve far more consideration than they will get under the Bill, and we shall do our best to amend it in that regard. Our aim is to give ratepayers a square deal. That is what we stand for.

4.32 p.m.

Mr. Michael English: My hon. Friend the Minister has implied, correctly, that the Bill has a very limited scope. The hon. Member for the City of Chester (Mr. Temple) went to the extent of describing it in even blunter terms. I agree that it is a puny Bill. Many of the points made by the hon. Member were quite fair.
The hon. Member went wrong, however, in over-elaborating his case. Let me give an example. He said that there is no real rental evidence in the case of local authority dwellings. I hope that he realises that there is no real evidence of their capital value on sale, either. By "no real evidence of their rental value" I take it that he means that they are let at, broadly speaking, the total cost in the housing revenue account less the available subsidies, divided up suitably among the houses.
In other words, they are let at a level which may well be less than the economic rent—and the economic rent would be higher than the difference that the subsidy makes between their cost and what the economic rent might be in an overcrowded area such as London. I hope that the hon. Gentleman realises that I am dealing with three things: the economic rent, the cost rent and the present rent which is the cost-less-sub? sidy rent.

Mr. Temple: What we are concerned with is the rack rent.

Mr. English: That is what I have called the economic rent, which in an overcrowded area would be higher than the cost- less-subsidy rent. There is no real evidence about the rack rental, I agree. But what is the alternative? It is, surely, as the Bill implies, a comparison between owner-occupied or rented houses in private hands, in some way. But there is no evidence of the capital value on sale of local authority houses. If the hon. Member says that it is not possible to take the rack rental, but the equivalent value is the market value on sale, where is the evidence on that?
I know that some local authorities occasionally sell their houses to an individual, but such a house will usually be in an area of local authority rented property and will have a lower market


value than would a house in the middle of an area of owner-occupied houses. The hon. Member has over-elaborated his case.
Nevertheless, like him, I am not entirely happy with the Bill, primarily because of what it leaves out. I realise that in this debate we cannot deal with the whole of local authority finance, but it is fair to say that the Front Bench opposite has more responsibility, in terms of time, than does my own Front Bench. Nevertheless, Governments of both parties have procrastinated greatly in terms of local authority finance.
My hon. Friend shakes his head, because the possibility now arises of this matter being investigated. But the possibility has been there for many years. It still needs looking into. It needed looking into long before the recommendations of the Redcliffe-Maud Commission concerning local government boundaries and functions were published. It needed doing before; it needs doing now, and it will still need doing, I guess, in several years time.
At the moment, we are talking about a method for the valuation of properties the taxation upon which produced £1,568 million in 1968 out of a total local authority expenditure—current and capital—of £5,682 million. In other words, this is the largest local source of local authority revenue. But—as the hon. Gentleman refrained from mentioning, but as we know, although I doubt whether the average ratepayer knows—it is a relatively small proportion of the total expenditure of local authorities. What local authorities need is more than half the United Kingdom income tax, or more than half of all Government taxes on expenditure, including S.E.T., to make up the difference between what they really spend and what the rates bring in. We could be doing something towards that.
I do not suggest that my hon. Friend can now transfer a large chunk of Government taxation from the central Government to local authorities, but I do suggest that he could be doing something more about rating. In respect of owner-occupied property a different method of valuation altogether might well have been considered by Her Majesty's Government. Their capital values are available and their rack rents are not available. There

are anomalies in other fields—commercial fields—but I do not suggest, as the hon. Gentleman did, that this arises only with nationalised industries. There are some strange anomalies in a variety of fields of rating which could well have been dealt with in such a Bill as this. It is relatively rare that we have an opportunity to discuss this matter, yet it is a matter of passionate concern to the average person in all our constituencies as we know when the rate demands come in at the appropriate season of the year.
There is some criticism, due to the fact that the Bill is so limited in scope, but, taking its scope as it is, I do not see the force of the complaint of the hon. Member. I cannot see why this is not the logical outcome of the fact that the Inland Revenue is doing the valuation at all. Originally, the valuation was performed locally by local authorities. At one time, I believe, it was the overseers of the poor or something like that. They were performed locally by modern local authorities until relatively recently, when, for the very reason that there was criticism by individuals of the fact that the valuation in one area could be quite different from that in the area next door, just as they criticised the different systems of street lighting or education which they found when they moved across local authority boundaries, it was transferred to the Inland Revenue.
Since it was transferred, it seems to me that if we are going to give valuation to a central organisation, so that it can be fair on a national scale, instead of differing from area to area, it would be quite illogical to say that, although they are supposed to do it as a national organisation, they are not supposed to compare one area with another.
Therefore, on that point, the Bill is the inevitable and logical outcome of the transference of valuation from local authorities to the Inland Revenue. Something similar is true with regard to the comparison between flats and houses—

Mr. Temple: Would not the hon. Gentleman agree, then, that if it is logical to do it all over the country in this limited sphere, it should be done for other types of property as well'?

Mr. English: I willingly accept that. As the hon. Gentleman will know, there are certain types of property for which it


is done nationally, such as the nationalised industries, which he mentioned, but I agree that if the principle is valid here it should be applied in other cases. Where I differ from the hon. Member opposite is in his claim that it was making more difficult for people to appeal against valuations. I agree with my hon. Friend that it was the complaint of the ordinary householder which caused the transference of valuation from local authorities to the Inland Revenue, but we did not at that time give the Inland Revenue the tool for the job, which, to avoid the very complaint which gave it the job, was surely the ability to compare valuations in one authority with those in another.
So I think that the hon. Member is resisting a Bill which does a good thing on the grounds that it does not do another good thing in relation to other types of property. It is a valid point, which I accept, but it is not a valid criticism of the Bill, except in so far as the Bill is limited in scope.
But the other side of the comparison is between flats and houses which is surely desirable. But the sort of thing which the Bill could have tidied up on this very issue is illustrated by the text of the Bill. In normal housing law we use the term "dwellings" in one sense, whereas in this Bill we use the term "dwelling-houses" in a different sense from the Housing Acts. In a Bill like this, dealing with this peculiarly technical subject, the opportunity might have been taken to tidy up some of the archaisms in the whole rating law.
I agree that the Bill is far too limited and puny, and that, unfortunately, once we have given it a Second Reading, we shall not be able to extend its scope in Committee. What is untrue is to say that, within its rather limited scope, it is an unnecessary or an undesirable Bill. I entirely welcome it, but I wish that it had done a great deal more than it does.

4.45 p.m.

Mr. Arthur Jones: (Northants, South): It would have helped the House a great deal if the Minister had elaborated on the disadvantages that the Inland Revenue finds with the present methods of valuation for rating purposes—[Interruption.] If there is no evidence of the present dis

advantages, on what grounds can the Bill—

Mr. Skeffington: The difficulty is simple. In relation to dwelling-houses, the Inland Revenue is finding it increasingly difficult to get, as it is required by practice and to some extent by Statute to get, the best evidence, which is the actual evidence of rents settled in the market. This is the great and sole difficulty.

Mr. Jones: This is the point emphasised by my hon. Friend the Member for the City of Chester (Mr. Temple) in referring to the rental evidence available, and I think that he reduced it to about one-twelfth of the total house stock in the country. But is it wise, first of all, to try to relate the rateable values on flats and the valuation subsidiaries for rating purposes, which are relative to the valuation of flats, to what I consider to be quite a different set of criteria for the rating valuation of houses?
We are thinking in terms of the superficial area of the accommodation, the cubic capacity, the amenities, the standard of fitments, and so on, in properties, whether they are flats or houses. There are grounds for my opinion that there is a wide range of variants which goes into the valuation of houses on the one hand and flats on the other. I should have been pleased to hear the degree to which it is felt in the Inland Revenue that these can be harmonised. I know that valuation for rating purposes is a complicated matter which has been built up on years of experience and expertise, but to try to provide now for all these formulae to be changed without saying how seems to me to carry little weight.
This surely bring us to the point that, if the Inland Revenue is to require valuations to be done in a certain way, so that comparisons are possible between flats and dwelling-houses, a much greater rigidity will be introduced into rating valuation. One of the salutary factors in rating valuation has been the lack of rigidity and the degree to which each case is dealt with on its merits. When one thinks of the lack of uniformity in houses, and certainly in flats, one realises that each case must to a great extent be dealt with on its merits.
I should like to hear from the Minister whether there is to be a change in


the Inland Revenue's attitude to valuation—whether, instead of the recognition of the wide variants, a much greater rigidity will be introduced, so that there will be the dead hand of uniformity across rating valuations in the incredible variety in properties.

Mr. Peter M. Jackson: Would the hon. Gentleman agree that his use of the word "rigidity" might be unfortunate in this context and that "uniformity" might be more appropriate? I suggest that the public generally would welcome a degree of uniformity in this matter.
I have had some experience of taking valuations to court. I have found in one area a disparity being allowed by a rating officer—for example, a disparity between a second floor and a ground floor flat because it was felt that the notional rent of the second floor flat was lower while in another area, when I lived in an identical flat on the second floor, I was told that the hypothetical rent of my flat and that of a ground floor flat were the same.
I reject that. Like the public generally, I would like to know where I stand and, for this reason, I suggest that the word "uniformity" might be more satisfactory—

Mr. Deputy Speaker (Mr. Sydney Irving): Order. The hon. Gentleman is making a speech rather than an intervention.

Mr. Jones: I appreciate what the hon. Gentleman is saying. I am concerned with the equity of the situation. I am anxious to avoid rigidity and uniformity because I cannot see how they are acceptable in the infinite variety of accommodation that exists. I appreciate the problems that are presented for the Inland Revenue and those who are professionally engaged in rating valuation matters, but the facts must be faced.
One must ask whether the Bill will ease the burden on the valuation office. Will the introduction of rigidity into rating valuations provide the solution we want, and is it the only solution available?

Mr. Skeffington: I pointed out that we believe that it will have advantages for everyone engaged in this sphere; the ratepayer, who will have a distinct advantage, the local authority and the professional experts.

Mr. Jones: That does not answer my question about bringing rigidity into rating valuations. I, too, am looking for greater fairness and ease of assessment of properties, but whether the Bill will achieve that remains an open question.
We are told that comparisons shall be made over wider areas of properties. The Minister said that in a number of cases private owners had asked that such comparisons should be made. I suggest that what is proposed will be a mixed blessing for both constituent parties in the problem. On the one hand, the private owner may be faced with comparables over a wide geographical area of which he has little knowledge and over which it would be extremely expensive for him to instruct professional advisers to cover.
On the other, I can envisage an absurd situation arising in which a valuation officer's figure is challenged, with a private person, or a professional adviser acting on his behalf, making comparisons over vast areas. That could cause the valuation officer an incredible amount of work, because he would need to check against the comparables being put in. One can think of comparables being made in Southend and South Shields, or in Exeter and Newcastle.
These are the absurdities which could be drawn into the unqualified geographical requirement outlined in the Bill. No qualification of the area appears in the Bill and nothing is said about economic variants not being disproportionate. The Minister should have been looking for ways to limit these geographical areas.
I therefore question whether the Bill will lead to greater rigidity in the valuation of residential hereditaments for rating purposes and whether there will be a real saving. If the Government are satisfied that it is necessary to have comparables over a wider area, will not this lead to even greater complications on both sides; that is, for the valuation officer and the private person engaged in a dispute over a rateable value? The same applies to any professional advisers acting in such cases.

4.56 p.m.

Mr. Ted Leadbitter: When debating a subject of this kind we must first ask what the Bill is expected to do. Having found the answer to that


question, we must go on to ask whether it will achieve that end without adding to the workload of the Inland Revenue and without creating more difficulties for the ratepayer.
While arguments about equity and capital values are interesting, this Measure will, I fear, add to the already complex system of rating law. What will the Bill mean to people? Will it make the position more satisfactory for those who administer the law or for those who must plead against valuations and try to study the system in all its complexity?
I have concluded that the Bill, though it has been described as small and tepid, will not get rid of the increasing number of anomalies in this sphere. Indeed, it may add to them. What may have been thought to have been general practice in making valuations comes under question when one reads, in Clause 1:
 …shall be regarded as relevant and admissible for the purposes of that ascertainment whether those other dwelling-houses are of the same or a different description and whether they are situated in the same or a different rating district or rating area …
Apart from that representing a highly complex operation for any rating officer, could I be told what it means? It is not for this House to create a paradise for the Law Society. We must try to use language which is meaningful to people. Having served on a local valuation court, I strongly advise the House to think many times before using language which will not only fortify the professionals in the court, but strike further terror into the hearts of laymen who must serve on these courts and make judgments.
Already, the ordinary member of the public who goes to a valuation court is faced with the ritual of everyone having to stand to attention while the worthy members of the court enter and take their seats. The public view a sort of Ku-Klux-Klan performance and many people are petrified before the proceedings begin. Not only is the awesome court laid out before him, but there are the professionals present—the Inland Revenue men.
As a member of the Estimates Committee which examined the Inland Revenue this year, I make it clear that 1 have nothing but admiration for the Inland Revenue's professionalism. But

it is exactly because of that professionalism that ordinary people are placed in a difficulty. To appreciate it fully, one has to experience what it means when an ordinary person says to the court, "I would like my rates reduced because of such and such a development", and then has to deploy his argument, to make his case.
It becomes a major difficulty, particularly when, even before the operation of the Bill, the Inland Revenue is able to quote case after case and resort to the language, which I used to hear with frequent boredom, about the hypothetical rent which such a property could obtain in 1939. I may be a little out of date on the year, because it is some time since I sat on a valuation court, but, nevertheless, that was the hypothetical line adopted.
If we members of the court were in doubt whether we should reduce the rates by a £1 or £2 that is, if we were novices in the game—the chairman used to trundle us out and, over tea and biscuits, look for some broad guidelines as to what to do. This is part of the facts of life. This is how it is practised. We are not dealing with professional courts of law, but with ordinary people. We are dealing with laymen, plaintiffs not defendants, who are looking for honest answers to very simple questions.
If we are to have in future the Inland Revenue being able to say, "We can now make valuations on the basis of looking at properties of different kinds in different areas", forgetting the whole history of rates, which, with all their anomalies, have been built up from the grass roots of local taxing responsibilities, we are creating, as it were, a morass of complications which a future Royal Commission will take many years to unravel.
The hon. Member for the City of Chester (Mr. Temple) invited us to look at the small print. From some criticism from, perhaps, some of my own colleagues, I have had to weigh carefully and, I hope, seriously, whether we should look at the small print, because many sins in parliamentary life are committed in the words of small print. On both sides of the House, the guilt is truly and firmly laid. In the penultimate line of Clause 1 we read:
… by reference only to such evidence …


We must pick up with great care that word only ".
I will put it and the other words in the context of the last sentence of Clause 1
 — and the valuation officer shall not be held to have failed in the proper discharge of his duties with respect to the preparation and maintenance of the valuation list by reason of his having assessed a dwelling house or dwelling houses by reference only —
Does this mean that the Inland Revenue, removed from its past tests in making an assessment of this kind, has not failed in its duty if the only evidence it brings forward is the kind of evidence called for in the Bill? if that is the case, then many local considerations can be removed.
Does it mean that, in future, a local valuation court will be faced with the situation whereby a person who is questioning a valuation will be able to say,
The local situation in this town is suchand-such and, therefore, I submit that the valuation is wrong and should be reduced ", only to be countered by the Inland Revenue spokesman saying, "I took into account dwellings of a like kind, or of not a like kind, in areas other than this town"? Is that line to be valid? It so, then surely this is not a lukewarm or a small Bill, but a damned dangerous Bill.

Mr. Peter M. Jackson: But would not my hon. Friend agree that the argument is equally capable of being presented by the plaintiff? Would it not be up to him to quote properties in other towns and areas which have lower valuations than that proposed for him?

Mr. Lead bitter: I came to the House of Commons with some experience of local government and my experience over the years is that ordinary people are quite unable to put into professional language a good case that they have. The fact that this is so should disturb every responsible public representative. Indeed, this is one of the reasons why I have asked for an ombudsman for local government.
But, this being the case, it is the responsibility of Parliament on a Bill like this to see to it that we include protection for the ordinary people and provide some machinery for it. That is our responsibility if it is right to have other tests

for making valuations, involving larger responsibilities for local valuation courts and perhaps making it more difficult for ordinary persons in making their applications.
When 1 was a member of the Estimates Committee, I made a submission to the Committee about the need to look at the question of local valuation courts.

Mr. Deputy Speaker: Order. The hon. Gentleman is going wide of the scope of the Bill. He cannot talk about machinery for valuation or valuation courts on this Bill.

Mr. Leadbitter: I respect your Ruling, Mr. Deputy Speaker, but I respectfully remind you that the hon. Member for the City of Chester dealt at some considerable length with the question of valuation courts. I believe that it has been accepted that, as a consequence of the Bill, some burden will be laid on these courts, and therefore, in that sense, although I will seek to limit—

Mr. Deputy Speaker: Order. The Chair must rule as it hears. The hon. Gentleman may make an incidental reference, but he is going much wider than that.

Mr. Leadbitter: I will seek to limit my comments in that direction, Mr. Deputy Speaker, so that we can keep mainly to the Bill.

Mr. Temple: On a point of order. May I point out, Mr. Deputy Speaker. that the only reference I made to a possible amendment was in this very sphere which, I think, is the only sphere in which an Amendment was in order, and in accordance with the provisions of the Bill, could be tabled.

Mr. Deputy Speaker: Nothing the hon. Gentleman has said suggests that my original Ruling was wrong.

Mr. Leadbitter: Nevertheless, the point will have been noted. The Bill will provide more work for local valuation courts. I leave it at that. This is only the Second Reading and this is something to be dealt with more precisely in Committee.
I have said that matters of equity or capital value, although interesting, are not as important as those arising from rating law. I was glad that my hon.


Friend the Parliamentary Secretary referred to the unfair burden of rates. The present situation is odd. Over the years, we have been arguing how best in the modern world to get rid of the many anomalies which arise from local taxation through the rates. The Bill makes not the smallest contribution to dealing with the frightful anomalies which are to be found in the large towns and in London in particular.
It does not deal with the problems which arise from properties in multi-occupation. In London, people may oe crowded into rooms for which they may pay unreasonably high rents, but for which the rates are included in the rents or are the direct responsibility of the landlord. Yet the rates of such properties are no higher than those for houses of the same kind in the same structural condition and in the same street but occupied only by two old-age pensioners. That kind of problem has not been solved and the Bill does not seem to be able to tackle it.
The general objective of any progressive party is to redistribute the national wealth, both salaries and other forms of income. One of the most complex problems in this respect with which we have not yet dealt adequately is that of rates.

Mr. Deputy Speaker: The Bill is concerned to add a subsection and a subsection alone. It does not provide an opportunity for a general debate on rating, on which the hon. Gentleman is now embarking.

Mr. Leadbitter: I was expecting that Ruling, Mr. Deputy Speaker, and I respect it at once.
We have to take great care, when passing legislation, to see that the people are harassed no more than necessary in a difficult situation in which mountains of paper have been almost the main cause of dangerous neuroses. We have to think of simplifying the system rather than making it more complicated. The Bill makes no contribution towards dealing with the problems of rating which have taxed us for years. It has appeared only because the 1973 revaluation requires it. As that is the Bill's only purpose, we shall have plenty of time to consider the wording of the Clause. If no undertakings can be given on

Second Reading, I hope that the Government will have taken warning and will resolve to meet some of our requests in Committee.

5.17 p.m.

Mr. Martin Maddan: The Bill distinctly points a finger at the deficiencies of the rating system. That is not the major topic of the debate, but it must be permissible to debate the Bill within the context of the rating system. To describe the system, I cannot do better than quote three sentences from the Secretary of State for Social Services, when he was Minister of Housing and Local Government. He said:
 First, the method of arriving at rateable value was always pretty difficult and it began to get detached from reality when rent control was introduced in the First World War. It is now rendered more and more incomprehensible and remote from reality as the number of privately rented houses declines—the only houses where rating has a direct relevance as a tax. The more we move towards owner-occupation, on the one side, and council house tenancies, on the other, the more mythological becomes the rateable value which forms the foundation of this eccentric local tax.
I quote that because I want to show that the Bill will not produce anything like satisfactory valuations for a rating system.
Before turning to that, I want to take up a fundamental point raised by my hon. Friend the Member for the City of Chester (Mr. Temple). In a sense, he asked what the Bill was all about, why it had been brought forward. He told us that it was so that preparations could be made for the 1973 revaluation. I am not certain that it is intended by right hon. Gentlemen opposite that the 1973 revaluation should take place, and this is fundamental to whether the valuation officers and we in this House are wasting our time. There is not much point in shoring up this system if it is not intended to have a revaluation in 1973.
I will quote just a few more words from the speech of the right hon. Gentleman:
 I might have fought harder against abandonment ".—[OFFICIAL REPORT, 6th December 1965; Vol. 722, c. 40.]
That is what the right hon. Gentleman said when he was talking about the 1968 proposed revaluation. The House, ratepayers and local government generally are all concerned about this, and I hope that the Parliamentary Secretary will take


the opportunity, not by implication, but categorically, to say whether the Government intend to proceed with the 1973 revaluation.

Mr. Skeffington: The date of the revaluation has to be determined by the House. When a revaluation could not take place in 1968, provision was made in the Act of 1966, Section 16 of which specifies the date as 1973. Legislation would be required if there were to be a postponement. The hon. Gentleman has seen the Queen's Speech, and I am sure that he can draw his own conclusions.

Mr. Maddan: I hope, therefore, that the Government are committed, because, in view of the use of the word "abandonment" and the general feeling prevalent in local government circles, we must now have certainty on this.
My hon. Friend the Member for the City of Chester considered that rates would remain a major source of local revenue. No doubt they will, but whether they should continue to produce such a large revenue is a different matter.

Mr. Temple: What I said was that it seemed from the purpose of the Bill that rates will be a major source of locally raised revenue. I did not say that I necessarily expected them to be just that.

Mr. Maddan: If rates were 5s. in the £, we should not be bothering about the Bill; anomalies here and there would not matter very much; but the high poundage based on the valuation makes the accuracy of the valuation and the comparability between one hereditament and another exceedingly important.
According to the Bill, there will be a great deal of valuation at one remove which will be, according to the evidence of the Select Committee, by the filling in of forms. I have not seen one of these forms, but I want to know about their legal status, by what authority they are issued and the penalties attaching to them. There may have been a recent provision which I have missed, but I suspect that the powers of the Inland Revenue are being extended wholesale in an area never previously envisaged. An ordinary householder who finds difficulty in filling up the form may do so erroneously and so lay himself open to severe penalties. We should not give a Second Reading to the Bill without an

assurance on that aspect from the Parliamentary Secretary.
The hon. Member for The Hartlepools (Mr. Leadbitter) gave one example of small print in line 24, and I wish to give another example of small print in line 14:
 for the time being in force
Those words refer to valuation lists for the time being in force, and must mean that one cannot dispute the comparative increases between one's neighbour and oneself. It is only possible to dispute what is happening in the new list, and one cannot say, "My neighbour's valuation has gone up 10 per cent.; why has mine gone up 20 per cent?".
This will put the ordinary ratepayer at a disadvantage. It may be argued that this is correcting an anomaly and that we should look to see what is fair and just for the present, but the best judgment that an ordinary householder can make is by seeing what is happening to his neighbour and comparing the immediate past with the present.
The relationship between flats, houses, bungalows, and so on, has been mentioned by hon. Members on both Front Benches. The Parliamentary Secretary went out of his way not to lead flat dwellers to hope that the rateable value of flats would come down to the level of houses. By the same token, therefore, the rateable value of houses must be going up. The Parliamentary Secretary shakes his head, but I do not follow how there can be an adjustment between the two without movement one way or the other. I hope that there will not be a perpetuation of the high valuations for flats.
Paragraph 375 of the Committee of Inquiry into the Impact of Rates on Households, the Allen Committee, Cmmn. 2582, reads as follows:
Taking all housing costs together in relation to income, we find that they are generally quite high for retired households …
Flats and retired households are the hall mark of my constituency.
The second phrase which I wish to quote from that paragraph is as follows:
The proportion "—
that is, the proportion of housing costs to income—
 is a good deal higher in London and the South generally …


People living in flats on the South Coast and in comparable areas, whose housing cost in relation to their income is so high, are extremely hard hit by high valuations. I hope that the Bill will make their lot a little better.
When the Parliamentary Secretary made his coy reference I thought that he was holding out a little hope, but did not want flat dwellers to have too much hope. That was very prudent of him. But when I said that that must mean that the rateable value of households will go up, he shook his head. I am at a loss to know the implication of all this. I am sure that the hon. Gentleman will have permission to speak again in the debate, when I hope that he will make the point clear.
I am not talking about the technicalities or niceties of valuation. Politically, what was felt to be most wrong about what happened in 1963 was the sudden apparent discrimination made against people in flats, particularly in areas like London and the South Coast. I hope that the hon. Gentleman will address himself with rather more precision to this matter and will tell us the advice which I am sure he has received from the Inland Revenue about the Bill's effects in this respect.
I have raised these points to show that the Opposition are not very happy about the Bill, or the circumstances of its introduction, or the state of the rating system which it is intended to improve. The rating system has gone so askew and has such huge burdens placed on it in the form of high rate poundages that we shall never get the matter right until we find other forms of local revenue which will enable the rate poundages to be reduced and therefore not make so extremely uncomfortable the anomalies which are bound to exist in any system based on the present form of rating valuation.

5.32 p.m.

Mr. Peter M. Jackson: I am happy to take up the request of the hon. Member for Hove (Mr. Maddan) to my hon. Friend the Joint Parliamentary Secretary for clarification of that part of his speech which I must apologise to you, Mr. Deputy Speaker, and to him for missing.
I should declare an interest in that for the major part of my life I have lived in a flat as an owner-occupier. I have felt a sense of injustice in that, unlike people who prefer to live in semi-detached or detached dwellings, I have paid what I regarded as a disproportionately high sum in rates. I should like to draw attention to the considerable inequalities which I have experienced.
The first flat which I lived in was in the East Riding of Yorkshire, in a dormitory suburb of the City of Hull. I sold that flat for £3,600 when I moved to Sheffield. It was rated at £82. I bought a flat with similar accommodation in Sheffield for a smaller price-0,250. Yet I found when I looked at the valuation that it was rated at £29 more—that is, £111. Obviously, I appealed. I drew the valuation court's attention to this disparity. I was told by the chairman of the court that the true basis of valuation was flats in this particular part of Sheffield and that I was out of order in drawing attention to the situation in the City of Hull or on the outskirts of Hull.
I therefore welcome the fact that the Bill intends to broaden the basis of comparison. I make the point to hon. Members opposite and to my hon. Friends who have been unanimous in criticising the Bill that it provides some safeguards for aggrieved ratepayers like myself in that when arguing their case before the valuation panel they can look outside their area for evidence upon which to base their argument, as I did. I do not think that anyone would argue that Sheffield is very different from Hull. There are safeguards in the Bill not only for valuation officers but for aggrieved ratepayers.
There is a considerable disparity between the basis for assessment for flats on the one hand and semi-detached and detached houses on the other. Before taking my case to the valuation panel in Sheffield, I went to some trouble in finding properties with an equal valuation; namely, £111. I was fortunate enough to find in estate agents' lists two properties on the market which were valued at over £6,000. I purchased my flat for just over £3,000. The properties which I found were rated at £111 and were in more select parts of Sheffield. They had four bedrooms compared with the two bedrooms and box room which was all the accommodation provided in


my flat. Yet the valuation was identical. I tried to direct the attention of the court to what I regarded as a highly anomalous situation in that here there were properties selling at a greater figure and yet they had a comparable valuation. Again I was ruled out of order.
A clear anomaly has been demonstrated and I hope that we shall go some way towards removing it, not only because considerations of equity and justice are involved but on another ground; namely, densities. Our population is increasing. We must accept that we shall experience high densities and that a higher percentage of our population will live in flats. I hope that flat dwelling will become more popular. It is accepted in the South but less so in the North and Midlands. There is a marked reluctance on the part of people to live in flats because of the high rateable assessments. I hope. therefore, that as part of the spinoff from this Bill some equality will be achieved in the valuation of flats on the one hand and semi-detached and detached dwellings on the other.
Finally, I wish to echo a comment made by many hon. Members; namely, that capital values are perhaps a more adequate basis for valuation than hypothetical rents. I do not live in a flat any longer. I sold my flat and moved into Derbyshire. The property in which I am now living cost almost twice as much as the flat which I sold. Yet there is what I regard, and what I am sure anyone else would regard, as an absurdity. The property for which I paid over £6,000 in Derbyshire is rated at £82 whereas the flat in Sheffield which I sold for just over £3,000 is rated at £111.
I do not regard this as fair and just in any way. We are becoming a more mobile population, and I am sure that people who move about would similarly not regard it as very just. I therefore welcome the Bill in the hope that it will iron out the considerable inequalities and anomalies which I have related.

5.40 p.m.

Mr. Julian Ridsdale: My hon. Friend the Member for the City of Chester (Mr. Temple) dealt in his excellent speech with the relationships between bungalows, flats and houses. I hope that the Joint Parliamentary Secretary, when

he replies to the debate, will say also what is to be the relationship for caravans rated individually.
My hon. Friend the Member for the City of Chester also drew attention to the fact that little time had elapsed between publication of the Bill and Second Reading. The Parliamentary Secretary, in his defence, put forward the argument that there had been little criticism of the Bill. I hope that he is not under a delusion in thinking that a lot of criticism about the Bill is not coming from the local authority associations or other people. I hope, therefore, that sufficient time will elapse before the Bill goes into Committee so that we may give it more consideration. I may be disparaging the Minister, but I fear that his intention is possibly to hurry the Bill unduly. We should give it adequate consideration.
In opening the debate, the Minister put up, I thought, an admirable defence against allowing criticism of the Bill by almost saying to Mr. Speaker, "The Bill is narrow in scope. Protect me from any questions about the reform of local government finance." What a wonderful way of silencing criticism!
Because I feared that that was what the Parliamentary Secretary might say, I went upstairs to the Public Bill office to find out how wide I might be able to go in discussing the Bill. I pointed out to the Public Bill Office that the aim and purpose of the Bill was to make more certain the long-promised revaluation of 1973. Surely, this affords very wide scope indeed, because the question is whether the 1973 revaluation will go through. My view of the Government's proposals, such as we have heard up to now, is that they are only tinkering with the rating problem and that far more radical solutions are necessary. Without radical solutions, I do not believe that it will be possible to have the 1973 revaluation, because—

Mr. Deputy Speaker: Order. Whatever the hon. Member has been told, the Chair has made it quite clear that the scope which the hon. Member seeks is beyond the debate.

Mr. Ridsdale: After what the Joint Parliamentary Secretary said, I feared that that might be the Ruling of the Chair, Nevertheless, I have protected myself in


thinking that I might be able to make a slight foray into the more general purpose, so that I may—

Mr. Deputy Speaker: Order. I have to say that no hon. Member has any special influence with the Chair.

Mr. Ridsdale: Thank you, Mr. Deputy Speaker. Nevertheless, I hope for a moment to get down to the detail of the Bill, important as it is, because I know that it has grave defects concerning the freedom of the individual. I want to see much more effective safeguards for the ratepayer as an individual.
It would be very wrong—indeed, deplorable—if for administrative convenience we allowed to go through a Measure such as this which put the ratepayer in a quite impossible position in the matter of sustaining effective objection to entries in the new lists. From my experience and what I can make out, it appears to be the Government's intention to pool evidence of rents of all types of dwelling, including flats and bungalows—nothing has been said so far about the renting of caravans individually—and that the valuation officer can seek his evidence from anywhere, within or outside the rating area, and call in aid the relationship between rents and gross value shown in the lists now in preparation.
All this suggests, at the very worst, that some weird short-term arrangement might be adopted for the revaluation, a crude kind of multiplier, for example. No matter how bad the contents might be, however, the plain fact is that such a murky pool of evidence will leave the poor old ratepayer in a quite impossible position to understand what has been included as relevant and admissible and what this relationship business means. I notice that several hon. Members opposite have made this very point, especially from their long experience in local government.
In my view, if the Bill goes through in its proposed form the position of the individual ratepayer will be hopeless. Collectively, something might be done. The obvious answer would have been that the rating authorities in every area could, and should, be the public conscience for all ratepayers in the area. That is a role which in North-East Essex and in Clacton. in my constituency, in particular,

I am glad to say they have effectively carried out since the Inland Revenue took over the revaluation for rating. I hope that they can be relied upon to act as help-mates between ratepayers and valuation officers to ensure a general level of fairness.
I cannot imagine that the Government will create a glorified local ombudsman, much as I sympathise with the hon. Member who made that admirable suggestion, for the protection of the individual. But could not the Government extend the powers of the valuation panels to include certain administrative obligations as distinct from their purely judicial responsibilities? If this were done, they could be an effective buffer. Their predecessors, the old assessment committees, certainly functioned effectively in the role of vigilant honest brokers.
Although these details are important, I hope that we shall not lose sight of the wood for the trees. What is really important ahead of the revaluation is that we get a genuine reform of the financing of local government, without which it will be useless. It is high time that we learned more about the Government's intentions on this vital issue. There is no declaration about it in the Bill. Because this is the first time that we have heard anything about the refinancing of local government, I hoped that the Joint Parliamentary Secretary. in introducing the Bill, would give us a glimpse into the Government's thoughts in this matter, because from my large experience of rating in North-East Essex I assure him that the 1973 revaluation will be impossible unless we have an adequate and wide reform of the financing of local government. In my view, the Bill only tinkers with the problem.

5.49 p.m.

Mr. Paul Hawkins: I am grateful for having the opportunity to say a word on the Bill. I apologise for not having been here at the beginning of the debate. I have as a professional man, a chartered surveyor, appeared in front of these rate courts on behalf of clients. I must admit that I have never particularly enjoyed it; it is not a part of my work I really enjoy. or, for that matter, understand very well.
However, I understand from the Explanatory Memorandum that the Bill is to provide a wider range of evidence of


rents of dwelling-houses to be used in the preparation of valuation lists. It goes on to say that evidence can be
 taken into account in, or adduced in connection with, a valuation to be drawn from areas, and from classes of dwelling-house, which cannot at present be so taken into account.
It ends by saying that the Bill
 will in fact ease the burden which a complete revaluation imposes on the Valuation Office".
What we want, as I think the hon. Gentleman the Member for The Hartle-pools (Mr. Leadbitter) has said, is to ease the burden on the ratepayers much more than the burden on the valuation office.
I shall be as brief as I can, but I am worried about two points, in particular, and there are two questions I should like to ask. Does the Bill mean that the valuation officer can take into account, as has been hinted by hon. Members on both sides of the House, when assessing a house in, say, my constituency, which has three little market towns and several villages, a house in a different area—say, London or Birmingham, or, for that matter even Cambridge, 33 miles away, where—and this is the point I want to emphasise—scarcity value is a major factor'? This would seem to be quite wrong.
In my area, within a radius of 20 miles, are to be found houses of similar type, and between them one can make a true comparison; but in an area where houses are in far more demand, as they are in Cambridge, a centre where there are many local government headquarters and nationalised headquarters, I would have thought it far more sensible to compare the houses within that centre with one another, not with houses in a small market town in my constituency.
Moreover, I would not have thought it possible in fairness to compare flats with houses, semi-detached houses with detached houses, and so on. There are different types of persons looking for different types of dwellings, and one has to take and compare like with like, and not with something entirely different.
I may be misunderstanding the Bill, but I assume from reading it that that is what it means, and I would think it quite wrong, and that it will add to the difficulties of the ordinary householder or his professional adviser.
My second point, which follows on from that, is that the Bill seems to be weighted against the householder who wishes to appeal, or against his adviser, who may be a surveyor or valuer in the district. He cannot compare houses in, say, Cambridge, 30 miles away, or even farther—in Norwich, 40 miles away—with a house which is in a little town near to his practice. He will have great knowledge of his next-door neighbour's house and he will have great knowledge of houses over several miles, but the Inland Revenue will surely be at an unfair advantage, because through connections with its offices all over the country it will be able to bring forward comparisons which the householder or his adviser in one locality cannot in any way check; and if he were to check them it would cost him a very large sum of money.
If I understand the Bill aright it does not seem to me to clarify the law; it does not seem to clarify practice; it does not seem likely to make the householder any happier, or his professional adviser for that matter, in going to appeal. Therefore, I would hope the Minister will make quite clear what it does mean and, if necessary, alter it, so that these comparisons cannot be brought against householders.

5.55 p.m.

Mr. Peter Walker: First, I should very much like to congratulate my hon. Friend the Member for the City of Chester (Mr. Temple) upon his very skilful analysis of the implications of the Bill and to observe how sharply contrasted his speech was with that of the Minister, who gave the impression that this was really a cosy, splendid little Bill to which we really need not give too much consideration and that it would just make a life a little bit more convenient.
I apologise to the hon. Gentleman the Member for The Hartlepools (Mr. Lead-bitter). I like to be in the Chamber when he speaks if he says the sort of things I like him to say. I rather gather that today he did, and I apologise to him, for I was not here when, I understand, he called the Bill a morass of complication and rather dangerous. I hope that as a result of what has been said this afternoon the Minister will give very careful consideration to what the Bill is meant to


achieve and how he thinks it is to achieve it.
I would ask the Minister to give a rather fuller explanation of what is the urgency of the Bill. It is rather remarkable that the Government introduce among the very first Bills of this Session this Measure, thus giving the impression that they are in rather a hurry to see it through because there is some urgency about it. I believe that the urgency was effectively described by my hon. Friend—that the valuation office is in such difficulties with all the additional work involved with the Land Commission that there is a desperate need to try to ease its administrative task. So we are being asked to accept this formula for the worst possible reason. I should like an explanation of the reasons for the urgency.
Perhaps the Minister, when giving that. will also explain the delay, and why the Bill comes at this time, because it was in 1965 that the Minister now the Secretary of State for Social Services told us that there was to be a complete reform of the rating system. All we get now, four years later, is a miserable two-Clause Bill which is likely to complicate the system still further.
There are some other points to which 1 should like the Minister to give particular attention. Is there any intention to stop the 1973 revaluation? I should like him to give an absolutely firm assurance that the Government intend to carry out revaluation in 1973.
Secondly, I should like him to comment on the potential effect of the Bill on some of the more remote rural areas. I am genuinely concerned that this basis of taking examples of houses throughout the country may have an adverse effect upon rural properties in rather remote areas. There is real concern among people in rural areas that their houses can be compared with houses which are in or near the places where there are more amenities, just because houses in rural areas may be of a type similar to houses in an area of greater amenity, and that that will be very much to their detriment.
As to the question of houses, flats, bungalows, all being compared together, I cannot believe the Minister has done

this without any thought at all as to the likely result. Surely before the Ministry decided to make this the basis of the Bill it inquired what the likely effect would be? Surely the Ministry did not just say, This is what the Government would like to do and we have no idea what is likely to happen ". There is a general view that such comparison would be to the advantage of flats, judging by contributions made in the debate.
Is that the Minister's view? If it is the Minister's view, it naturally follows that the Bill would be to the disadvantage of houses. Is this the object? The Government have got to "come clean" on this issue. At present, they are just saying, "We are bundling them all together, but we do not know what the result will be ". I do not believe that the Government are so ill-informed as to what the result is likely to be. It may be that the Bill could in certain areas bring quite considerable increases of rates on houses, as compared with flats. If that is the object of the Bill let the Government be perfectly clear about it and state that this is their object and that that is what they believe will happen. Otherwise very real suspicion and anxiety will exist among ratepayers living in houses and bungalows.
The Parliamentary Secretary has the task of replying to the cogent point made by my hon. Friend the Member for the City of Chester as to why only houses, flats and bungalows are concerned. Why does this comparison not apply to other forms of property, including mixed property?
When my hon. Friend posed the position of the local person finding half a dozen similar houses in his locality, the Parliamentary Secretary stated that the individual would be perfectly at liberty to find examples from his locality, and what better example could one have in trying to come to a decision? This therefore means that in his view the local circumstances are more important than any other factor. But is that so? Is it so, for example, if it is argued the other way, that these types of houses in other parts of the country or houses with similar amenities in other parts of the country will form part of the argument which is more important than those parts presented by the individual?
One of the difficulties about this Measure is that the task of collecting evidence nation-wide is easier for the authorities than it is for the individual. If nation-wide evidence is to be obtained to the benefit of the authorities it can be easily obtained, but the individual searching for nation-wide examples has far more difficulty and is involved in far greater expense. To that extent this Bill could be of advantage to the authorities at the expense of the individual. If so, this is a very serious shift of advantage for the Government to undertake.

Mr. Arthur Jones: Does my hon. Friend recognise that when submitting evidence to a valuation court one has local evidence which the owner will submit as opposed to nation-wide evidence submitted on the part of the Inland Revenue? How will the Inland Revenue present that knowledge and information?

Mr. Walker: This is a very important fact. The Inland Revenue has available all the nation-wide information, but the individual has no such information: he has only local information. There is a very real difference of advantage as a result of this Measure.

Mr. R. W. Brown: (Shoreditch and Finsbury): This has always been so in my area, where fiats are very much higher rated than houses in Islington. A four-bedroom house in Islington is the equivalent to a one-bedroom flat in Finsbury. When people objected to their assessments in 1962-63, they were told that they had to make the comparison in relation to their own area and could not pray in aid evidence from further away.

Mr. Walker: I am willing to concede that there may he advantages to an individual in obtaining evidence outside his area, but on balance when there is a dispute between the individual and the authorities in practice the individual can fairly easily collect supporting evidence locally because he has the means of obtaining it while the Revenue has all the resources whereby to collect nationwide evidence.

Mr. Brown: Even the valuation panel will not permit evidence to be taken from further than the immediate area.

Mr. Walker: This is what the Bill is all about and what we are objecting to.

Another factor which I want the Parliamentary Secretary to take up is this. As it has been decided to bring in this emergency Measure, why did the Government not include other matters urgently affecting rates? I quote one instance which was referred to by my hon. Friend the Member for the City of Chester. Changes in the nature of the gas industry have created circumstances by which a great deal of the property used by the industry will not come under general rating. We now see a Bill brought in because of the pressure on the valuation office through previous Government legislation, but bringing no advantage to the ratepayer, and bringing potential disadvantages without the Government giving an adequate reason for introducing it at this moment. The Parliamentary Secretary may be assured that we shall not only listen to his remarks in winding up the debate but shall take great care over the Committee stage of the Bill.

6.5 p.m.

Mr. Skeffington: With the permission of the House, I wish to reply to the many interesting points which have been made in the debate.
As I expected, a number of hon. Mem- bers have directed their attention to the possibility, as they saw it, that the individual rate payer might be disadvantaged under the Bill. That was a very proper point to make, but I assure hon. Members that this was not the purpose. Indeed, we think that the contrary will be the case. I shall seek to give some examples.
It was through no fault of mine that we were precluded from having a much wider discussion of the whole rating system and local government finance. I am dealing with this Measure, which obviously has a very limited application, and, as with other hon. Members, I have to keep within the rules of order. Personally, I should very much welcome an opportunity to deal with all the implications of local government finance. No doubt there will be further opportunities for that when we come to the restructuring of local government. The next major milestone will be the White Paper on the reform of the structure of local government, about the end of the year or the beginning of next year.

Mr. Ridsdale: Will that include an item dealing with local government finance?

Mr. Skeffington: The hon. Member must wait to see the White Paper. It is to deal with structure. I do not know how much it can deal with other matters. I do not think it possible to deal with the whole subject of finance until w-t know something about the structure.

Mr. Peter Walker: This is the first time that we have heard the White Paper referred to in terms of being likely to appear next year. Has this significance? It has always been promised at the end of this year. As the Maud Report contained no reference to financing, presumably the White Paper will follow suit.

Mr. Skeffington: As to the second point, the hon. Member had better wait until he sees the White Paper. I wish to give the best advice I can as to what will be the next stage.
Although the debate has been brief, the number of relevant points made has been large. The hon. Member for the City of Chester (Mr. Temple) made a number of points, to one of which I referred in an intervention which he kindly allowed me to make. Because it is important. I repeat that, as I said in my speech and in the intervention, there is nothing in the Bill which takes away any rights of any party in considering these matters at any level or of any kind. It can be argued that all parties, quite apart from the valuation officer, will have a better opportunity to present evidence about rental values than has been the case hitherto. That is the whole purpose of the measure.

Mr. James Allason: (Hemel Hempstead): Would the Parliamentary Secretary consider the position of valuation panels? I find it difficult to follow how, if evidence is given about the value of houses 100 miles away, a valuation panel will be able to go and inspect those houses. Is it reasonable that this should be expected of them, or does the hon. Gentleman wish to cut down the scope of valuation panels and prevent them inspecting houses?

Mr. Skeffington: Perhaps I can deal with that point when I come to the matter of evidence.
I affirm what I said before, that in a number of cases which have come before the Lands Tribunal, and in cases within my own experience, if it had been pos

sible to adduce evidence wider than that existing in the rating area concerned it would have been greatly to the advantage of local rate payers in an appeal. But under the existing practice, apart from there being some discretion in the valuation office which is always open to challenge, in the normal way that additional evidence would be precluded. It will now be possible for it to be brought forward.
In the same way where one is dealing with hereditaments of a different description, it will be possible to bring into argument not only the valuation of houses, but, at the same time, if it is helpful to any of the parties, valuations of flats, bungalows, or caravans, or any other form of residence.
All those who are experienced in these matters will realise that it is a matter of evidence, and that the rules of evidence in rating cases are no different from the general rules of evidence in other cases. The final judgment which is given depends on the view taken by the court of the evidence presented. Therefore, it was a fallacy for the hon. Member for the City of Chester to say that a ratepayer who produces evidence of six houses in the local area will be at a disadvantage because someone else may go 100 miles away for evidence.
The fact is, as Lord Denning said in his judgment, that although at that level all evidence can be admissible its "goodness" or "badness" depends on the weight given to it by the court. If either a valuation officer or a ratepayer has a ready-made example on the other side of the street, then that is the best evidence. It must be tested against the normal rules which apply when a tribunal of any kind considers evidence which is before it.

Mr. Temple: Why in the Bill is it necessary to say of evidence that it shall be "relevant and admissible"? If evidence is any good at all, it is relevant and admissible. Why is it necessary to spell this out?

Mr. Skeffington: The hon. Gentleman has not sufficiently studied the rules of evidence. There are two points to be considered. First, evidence has to be relevant, but also, it has to be admissible. Hitherto, the general rule has been—this certainly applies to local valuation courts —that evidence which goes very wide of the area is not admitted.
The Bill admits that evidence, and it then can be considered whether it is relevant and how far it can be weighed in the adjudication. Nothing in the Bill alters the way in which the tribunal has a duty to consider the evidence; it will now be able to look at a wider range and different descriptions of dwelling houses. But the weight which is given to that evidence will be for the tribunal.
The best evidence for rating purposes in a local valuation case would be an identical house in the next street. But difficulties arise for both valuation officers and ratepayers that so often such evidence does not exist. If large numbers of hereditaments were being let in the normal free market, then the evidence would be there and there would be no need for the Bill.
But the fact is that instances of rental values being negotiated in the open market are becoming more and more scarce. Therefore, in the interests of everybody it has been thought right to allow the description of various properties to be considered and also examples over a wider area.
It does not mean, as was suggested by hon. Members opposite, that a whole number of examples will be mixed up together. If either a valuation officer or an individual adduces evidence about the value of a house as opposed to that of a flat, then it is up to either side to produce evidence on the other side as to size, convenience, and so on. It is to be considered only to the extent that it may be helpful to compare other categories of property.
What hon. Gentlemen opposite must not overlook is that it is for the court to make its judgment on the quality of the evidence before it and the best evidence will be the nearest evidence. I will not bind myself in every case, but would say that the best evidence would probably be that of a dwelling house within a stone's throw of the house which is being adjudicated.

Mr. Leadbitter: The Parliamentary Secretary is making the situation far more confused. Does he mean that we must accept a situation in which he says the best evidence is the nearest evidence —that which is likely to be in the same street? What, then, is the purpose of the Bill? Why seek powers to go else

where for evidence if we are told that the best evidence is in the next street?

Mr. Skeffington:: When my hon. Friend considers the point, I am sure that he will see the answer. The Bill meets the case where there is no best evidence, where there is no local evidence. If that point has not been grasped—

Mr. Leadbitter: Mr. Leadbitter rose—

Mr. Skeffington: I will give way in a moment. I must make progress with my argument. This is a most elementary point. It is because the evidence of rents is becoming so scarce that we feel the need for this Measure.
The hon. Member for the City of Chester commented on the unfairness of gross values and asked why they have continued to be used. That matter may be considered when the time comes for the basis of rating law to be altered. It has been mentioned that in 1965 my right hon. Friend the present Secretary of State for Social Services referred to the matter of gross values. A number of these cases have been the subject of appeal, and I believe that the situation is now better than it was.
I am not saying that we now have the perfect rating system and that if only we put in this addition, all will be well. These are matters which will have to be considered later in greater detail. We are considering the rating law as it is, coupled with the difficulties to which I have referred.
My hon. Friend the Member for Nottingham, West (Mr. English) and the hon. Member for City of Chester both referred to capital values and suggested that these might be a better basis. The fact is that capital values cannot be used at present. However, it is a point which will be noted in a review of these matters which the Government are making.
The hon. Member for Northants, South (Mr. Arthur Jones) hoped that there would not be too much rigidity. My view is that this widening of the evidence and the contrasting in a rating area of different types of properties will make for greater flexibility. But, again, the rating law depends upon the assessment of the individual property and the relation of rents to gross value. Anything which can be shown to give better evidence in the sense of having both different types of


properties and over a wider area, I think, will go to the aim that I have expressed rather than to rigidity.
With the growth of transport and the building of new and expanded towns outside the greater conurbations, there has been some levelling of property values. There are variations, of course. No one is saying that properties in the centre of London or Birmingham can be compared with others in remote areas. If that sort of evidence was brought before a valuation court by a valuation officer, the court would know what weight to attach to it.
My hon. Friend the Member for The Hartlepools (Mr. Leadbitter) made criticisms of the language. If my hon. Friend is a member of the Committee which considers the Bill, I hope that he will assist us in getting the Measure made more simple and clear. Having studied a good deal of rating legislation over the past 10 or 15 years, I think that the Clause which my hon. Friend criticises is perfectly clear. Compared with the 1953 Act, for example, which was introduced by Mr. Harold Macmillan, if one compares what a valuation officer had to do under that Act and under this Bill I think that the advantage is with the Bill.
My hon. Friend also made a point about different types of dwellings. All that Clause 1 does is to say that, in making his list, if a valuation officer brings in properties of a different type or from a wider area as evidence, by that he is not guilty of failing to carry out his duty. Obviously he will want to produce examples which will give him the best list, and the weight to be attached to such evidence is a matter for the court.
The hon. Member for Hove (Mr. Maddan) and the hon. Member for Worcester (Mr. Peter Walker) both referred to the 1973 revaluation. I have pointed out already that Section 16 of the 1966 Act specifically puts in a date. Legislation would be required if the Government proposed to alter the date. There is no reference in the Gracious Speech to legislation to postpone the 1973 revaluation. It would be a tragedy if the revaluation had again to be postponed. The longer that it is delayed, the greater becomes the anomalies. We want to get on with it with the minimum amount of

complication. It is because rental evidence so often is not available that we have this Measure.
I was also asked what was the authority for the issuing of forms. No issuing of forms arises under the Bill. However, the authority for the Inland Revenue issuing forms is Section 82 of the 1967 Rating Act. Hon. Gentlemen will find the authority there for what is being done.
I was grateful for the remarks of my hon. Friend the Member for The High Peak (Mr. Peter M. Jackson), though I cannot say whether his own valuation will be better now that we are introducing new types of dwellings. Nor had the Government that in mind when the Bill was being devised.
The hon. Member for Harwich (Mr. Ridsdale) asked me about caravans. Certainly, they can now be contrasted with any other form of dwelling. However, the best evidence for caravans obviously will be about caravans, and that comes back to my point about the weight which will be attached to evidence. His wider points are beyond the scope of the Bill. Certainly, they are beyond the scope of my remarks.
I come now to the speech of the hon. Member for Worcester. I have answered his point about postponement, and I hope that I have answered his point about evidence. It is extremely important to realise that the whole purpose is to get the widest facilities for everyone before the court. That is why the Bill is drafted in this way. I cannot find any reason to believe that the proposed procedure will have the kind of effect which he fears. If one is dealing with the advantages or disadvantages of remote properties, the evidence of remote properties elsewhere will be helpful.
I know that right hon. and hon. Gentlemen opposite have a "bee in their bonnets" about the Land Commission. However, it is the total load of work and not merely that which has been created in connection with the betterment levy which has given rise to the necessity for the postponement.
I hope that the House will agree that this is a useful Measure. We shall consider all the points which have been made—

Mr. Maddan: Mr. Maddan rose—

Mr. Skeffington: If the hon. Gentleman is rising to ask whether flats or houses are likely to go up, no one can possibly say what the effect will be until the evidence has been produced, valuations are completed, and matters have been tested.
My point is that many flat occupiers thought that, because of the scarcity of rental evidence, their assessments had been pushed up to make up for the lack of information and knowledge elsewhere. They felt that they had a grievance because they could not contrast flats with dwelling-houses. I think that that sense of grievance will disappear, because it is now possible to compare and contrast and to talk about the various types of valuations for the particular types of properties.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills.)

Orders of the Day — MONOPOLIES AND MERGERS

6.30 p.m.

The Minister of State, Department of Employment and Productivity (Mr. Edmund Dell): I beg to move,
That the Restriction of Merger Order 1969 (S.I., 1969, No. 1134), dated 6th August 1969, a copy of which was laid before this House on 11th August, in the last Session of Parliament, be approved.
This order, which was made on 6th August, 1969, prohibits any steps resulting in a merger between the Rank Organisation Ltd. and the De La Rue Company Ltd., and the making and carrying out by the Rank Organisation or any subsidiary of agreements or arrangements for the acquisition of any stock or shares in the De La Rue Company Ltd. It gives effect to the report submitted by the Monopolies Commission under Section 6 of the Monopolies and Mergers Act, 1965, on the merger proposed between the Rank Organisation and De La Rue. The commission concluded that the proposed merger operated, and might be expected to operate, against the public interest, and recommended that it should not be permitted. The then President of the Board of Trade announced his acceptance of

the Monopolies Commission's Report on 2nd June.
In general, whenever the Monopolies Commission has reported that a merger between two companies would be against the public interest, it has been the practice of the Board of Trade not to rely upon the use of the statutory powers to prohibit the merger but to invite the chairman of the company, or chairmen of the companies, concerned to undertake not to proceed with the merger. In accordance with this practice the chairman of the Rank Organisation was asked to undertake that the Rank Organisation would not renew its former bid for the De La Rue Company or take any other actions to place the organisation in the position of controlling company. lie declined to give any such undertaking, as indeed he was fully entitled to, and accordingly to remove all uncertainty about the position, and to give full effect to the commission's conclusion, the President of the Board of Trade decided that he had no alternative but to lay the present order before Parliament. This is the first time that an order has been made under the power given by the Monopolies and Mergers Act 1965 Lo prevent a merger which the commission has recommended should be prohibited.
It is not necessary to repeat at length the arguments which led the commission to its conclusion that the proposed merger would be against the public interest. These are set out in full in the report which has been placed before Parliament. Indeed, I do not intend to speak at any length in the hope that I shall have the opportunity to reply at the conclusion of the debate.
In summary, the view of the commission was that there was a serious risk that the efficiency and trading volume of De La Rue would be adversely affected by the proposed merger and that any loss of efficiency would harm the public interest, including the balance of payments.
The commission stated that, whilst it could not exclude the possibility that if other things were left unchanged by the proposed merger the marketing orientation of Rank's management might lead to greater efficiency, this effect was, in its judgment, outweighed by the real risk, bordering on near certainty in some matters, of loss of efficiency with damaging long-term implications, together


with a real risk of loss of important business and business opportunities. These losses, in the commission's opinion, would be difficult or impossible to make up later.
Having received submissions from both companies and having had the benefit of hearing their representatives, the commission formed the opinion that the merger would bring with it a real and serious risk of damage to the efficiency of De La Rue's business, of its effects on management personnel, and consequently on overseas trade connections.
The then President of the Board of Trade, in accepting the commission's report, was satisfied that the commission had satisfactorily carried out its function of investigating the implications of the proposed merger and that the conclusions reached by the commission were sufficiently supported by the evidence and the arguments presented in the body of the commission's report. The decision to make the present order was a necessary consequence of this view once it became clear that the Rank Organisation Ltd. would not voluntarily agree not to proceed with the merger.
I therefore ask the House to approve the order.

6.35 p.m.

Sir Keith Joseph: We are grateful to the Minister of State for introducing this order briefly and courteously. It is, as he says, the first order made under the Monopolies and Mergers Act, 1965, and we do not think it right to let it pass without making some comments on the working of the Act.
We do not intend to divide against the order. We simply want to use this opportunity to make some general comments on the policy behind the order before the House.
Before going on to the substance of the argument, I ask the Minister to convey to his right hon. Friends that there was one minute pinprick that could have been avoided by the Government in the procedure for handling the decision that they reached.
The Minister will remember that for some reason or another—I cannot recall what that reason was—the Government published their decision before the

reports of the Monopolies Commission were available to the public. In publishing their decision, the President of the Board of Trade made use of a term of art, the word "mischief", and said that the Government and the Monopolies Commission could see no way of avoiding the mischiefs that the merger, had it been allowed and had it come about, might have created for the public interest.
We who study these matters know that "mischief" is a term of art. To the public as a whole it indicated a degree of danger to the public interest out of scale with that which was revealed even in the opinion of the Monopolies Commission's report when that report was published. Should this occur again, I suggest that that term of art might be translated into a phrase that would be more neutral.

Mr. Dell: It might be helpful to the House if I make clear immediately that I understand the point that the right hon. Gentleman is making. In future, we hope to avoid this term of art.

Sir K. Joseph: I am grateful to the Minister for that indication.
Since the Monopolies and Mergers Act, 1965, came on to the Statute Book, a great deal has happened in the sphere of mergers. We, for our part, have begun to take into account some of the more recent events in forming our own views. There has been a veritable flood of mergers. If we had to identify a single cause for the release of this flood of mergers, I should say that the conversion of the Labour Party from a wholesale abomination of mergers on ideological grounds to an attitude, first, of neutrality and then of positive encouragement was possibly one of the most considerable factors.
Be that as it may, there has been a flood of mergers and I should like to pay tribute to the then President of the Board of Trade, now Secretary of State for Local Government and Regional Planning, for the way that he resisted what must have been considerable pressure and allowed practically all the mergers that were proposed to be decided yea or nay by the market. I suppose that with the I.R.C. in action as a Government agency it would have been odd if he had behaved otherwise. Nevertheless, he must have


been under considerable pressure, and we pay tribute to him for resisting it.
The pros and cons of mergers have been debated frequently. I think that we can all probably accept that while bids and takeover projects distract management and that that can in certain circumstances be a disadvantage, on the other hand, the threat of bids or takeovers, if managements do not make good use of their assets, is a stimulus which is, on the whole, beneficial to the public. The threat of takeover, if managements do not do their jobs properly, keeps them on their toes. Even abortive bids can sometimes be beneficial. For instance, the recent I.C.I. bid released an astonishing surge of performance by Courtaulds.
The Government accept, as they show in their reaction to this and other mergers, that, in general, mergers are either beneficial or neutral and can be left to the judgment of the market.
Behind this order, and connected with it, we have three documents. First, the Monopolies Commission's Report on Rank /De La Rue in the first half of document No. 298. Secondly, the Monopolies Commission's appraisal of mergers in general in the second part of this same document, from which presumably the Government took their considerations in deciding how to react to the first half of the document. Thirdly, we have the documents in a publication—

Mr. Speaker: Order. We cannot discuss the annexe to the report, nor the Government's Paper on mergers and monopolies. This is a specific merger to which objection has been taken and which the Statutory Instrument forbids.

Sir K. Joseph: I will try to abide by your Ruling, Mr. Speaker.
It is common ground that most mergers can be left to the judgment of the market. The Government have specifically rejected legal guidelines—probably rightly. It would be common ground that if the Government identified a particular evil that might result from mergers they are free to bring legislation before the House —for instance, to protect by an Amendment to the Redundancy Act middle-aged people who are made redundant. Otherwise the Government agree that the market should decide in practically every case. After all, shareholders invest and risk their money, so it is only right that

they should be given the final decision, unless the public interest is clearly at stake.
It is again common ground that there is one particular kind of merger which should not be left to the final decision of the shareholders. I refer to a merger which threatens to create market dominance or monopoly. The 1965 Act seems to make abundant sense where there is a threat to create a monopoly that might be against the public interest. It seems sensible to refer such a merger to the Monopolies Commission.
It is difficult enough for the Monopolies Commission, even here, to decide what is in the public interest, as witness the change of mind by the Government within two years on the Associated Fisheries/Ross case.
Here in the order there is no threat to competition and no threat of market domination. The reference to the Monopolies Commission by the Government specifically excludes any question of monopoly. The companies covered by the order are both international traders. They are both market leaders; they are both pioneers in giving information more than the law requires to their shareholders; they are both partners with American giants; they are both proud and confident managements—and if they were added to each other a monopoly situation would not be created. No one knows whether the market would have allowed the merger or thrown it out had the Government not intervened.
It was referred to the Monopolies Commission because it was a conglomerate merger. It was one of the new class of conglomerate mergers on which the Government wanted advice. I suspect that it is common ground that increased disclosure under company law can help tame any conglomerates that arise in this country by subjecting their managements to detailed public appraisal of their performance in each field in which they trade.
Subject to that, we believe that conglomerates are neither inherently good nor bad. If there were too many of them, plainly the tendency might prove worrying. In extreme, a vast increase in the number of conglomerates could threaten to change the industrial and even the social and political fabric of our society.
If there were a handful of companies in this country, each trading in a large number of different fields, it would be possible for the Government of the day to sit in a single room with the heads of the industries and firms employing the majority of the population, and plainly the implications for freedom would be serious. But we are nowhere near that position. In America, there has been a flood of conglomerate mergers, and Dr. Mueller, of the Federal Trade Commission, only this week produced a 700-page report on the implications. Conglomerate mergers could become significant here. Their implications are spelt out in the two reports behind the Order in front of us.
A conglomerate can, in principle, increase efficiency by carrying good management into areas where it is needed. I hasten to say that there is no question in this merger of a sharp difference between the management skills in the two companies. There is no significant conglomerate trend in this country, and there is no monopoly trend in this merger.
Why, therefore, was this decision removed from the shareholders concerned? The reason is given to us in paragraph 82 of the Monopolies Commission Report, whose final words are:
 We "—
that is, Monopolies Commission—
 conclude that the stock market's reaction cannot, therefore, be relied on to reflect the efficiency aspects of a take-over.
Before it reached that conclusion the Monopolies Commission argued that shareholders are often interested only in what is offered to them in a bid—be it cash or paper—and are not interested in the prospects of the company in which they are at present holding shares. But if a bidding company believes that it can make better use of the assets of another company and thus can afford to offer more than the current market value set upon that company's shares, is it not in the national interest, subject to increased disclosure, that the bidding company should at least have a chance to put its proposals to the shareholders of the other company?
It is said that the bidding company can offer the moon. I wonder whether

that is true. First, during the last few months the glamorous price-earning ratios which might have put some companies in a position to offer very good terms, in paper, to the shareholders of the company proposed to be acquired have lost their sparkle. Some of the glamour stocks of last year have tumbled sharply.
Secondly—and I have referred to this —disclosure is a discipline upon the bidding company, and, thirdly, the bidding company also has its restraint because it has to justify its offer to its own shareholders. If it offers the moon its own shareholders will rightly protest. Even though, in this case, the Rank Organisation is not shareholder-controlled, it has to satisfy the investor if it is to keep the market's respect.
So we have the position that the Government in general agree that the shareholders should decide on mergers except where a monopoly is threatened. In this case they withdrew that right to decide from the shareholders because, I believe, they accept the Monopolies Commission argument in paragraph 82, that the Stock Market cannot be relied upon to reflect the efficiency aspects of a take-over. The implications of that sentence is that someone else can be relied on to reflect the efficiency aspects of a take-over. Who is that? Presumably it is the Monopolies Commission itself and then the Ministers.
The implication is that whereas the market cannot decide, the Monopolies Commission and the Ministers can decide where the national interest lies in terms of efficiency. But the whole of the report on the proposed merger shows just how nicely balanced are the arguments for or against the merger, in terms of public interest. They are extremely nicely balanced. Is it sensible to expect the Monopolies Commission and the Ministers to judge such finely balanced arguments and possibilities?
I shall not go over the arguments—they are spelt out in paragraphs 40-43 of the document—but, in brief, the Monopolies Commission concluded that if the merger went through there was a risk that some of the senior managers of De La Rue would quit; that, as a result, some trading relationships with foreign companies and foreign individuals would


be jeopardised, and that if those relationships were jeopardised some of the trading volume of De La Rue would be at risk, and if the trading volume were at risk the balance of payments might suffer.
There was a linkage of assumptions on which the Monopolies Commission recommended, on balance, that the merger was against the public interest. The whole of this linkage depended upon the attitude of De La Rue's senior management, or some of it, to the possibility of Rank, taking over their company. I accept that the managers concerned were entirely within their rights in their passionate conviction that a Rank take-over would damage the company and its shareholders and were prepared to risk their jobs in order to express their point of view.
But there are three things to be said about the attitude of management which is disclosed. First, if key managers had left, damage might have been done. Of course it might. But, second, even if damage were done in one sector, who could tell whether the arrival of Rank, had the merger gone through, would not have more than offset that damage by improvements elsewhere? No one can tell.
Third, a company's management can be outstanding and very sure of itself, but it cannot guarantee the future, even if it beats off the bid. We have the recollection of what happened to Edwards High Vacuum when its managers also threatened to leave if, in this case, an American company, Varian, bought Edwards High Vacuum—and we know what happened afterwards. So the attitude of management, which is at the very centre of this order, is important but, in our view, not conclusive.
So the Monopolies Commission, given, I now suggest, a wrong task, decided that the public interest would be better served by barring the merger on a number of linked assumptions. What was the damage to the public interest which was feared? It was a marginal loss of balance of payments. No one can be sure that it would have occurred. The Monopolies Commission itself showed a much more robust attitude to balance of payments when, in the Cellulosic Fibre reference, it recommended that tariffs

should be brought down in the particular case, although the inevitable result of such an operation, in the short term at least—perhaps only in the short term—would be to damage the balance of payments.
The Monopolies Commission may have been right or wrong. No one can tell, but the point which I have been trying to make in this rather laborious argument is that there is no reason to think that the Commission is any better equipped to judge who will make better use of the assets than the shareholders and the market concerned.
I have already stressed that, had there been any threat of market dominance or monopoly, we should, of course, have agreed that the merger might well have been referred to the Monopolies Commission, and might well, justifiably, have been barred. But we doubt whether efficiency or balance of payments questions are really suited or even relevant to the Monopolies Commission type of inquiry. After all, even if exports were shown to be likely to suffer, who can tell whether the resources so released might not have been switched to repelling imports by manufacturing import substitutes?
We accept also that, if the pace of change towards conglomerates accelerates, there might be a case for referring some conglomerate mergers to a tribunal, but there would surely be need for a higher minimum than the £5 million combined assets in the Monopolies and Mergers Act, 1965. Moreover, if conglomerates came to be referred—I repeat that it might be necessary if the trend increased—there would surely be need for a special remit to the tribunal concerned.
I think that it is common ground that conglomerates, given disclosure, can spread good management, and if the threat of market domination is removed, there would surely need to be special guidance given to any tribunal which was set to decide on any particular case. The question then would not be marginally more or less efficiency or marginally more or less on the balance of payments, but whether the particular conglomerate under consideration added to such other conglomerate mergers as had occurred threatened the known fabric of social,


political or economic life. I repeat: we are nowhere near such a situation here.
The Government have rightly, in our view, rejected legal guidelines for mergers. The Government, rightly, have the power to refer to the Monopolies Commission mergers which threaten to dominate a market or a monopoly. The Government, in our view rightly, accept that the market, that is, the shareholders, should decide in practically every other case. But, in a handful of non-monopoly cases, the Government reject both law and the market.
In these cases, they allow the decision to rest on three successive unpredictable reactions—first, the reaction of Ministers to a proposed merger: should it be referred or not? The second is the reaction of the Monopolies Commission: should it be recommended or not? The third is the reaction of Ministers again to the Commission's recommendation. In our view, the Monopolies Commission, diligent, conscientious and capable though it is, is no better equipped to make these decisions in the sort of case which we are discussing, in the present environment, than the market is.
The result of the Government's policy is merger control used haphazardly and arbitrarily. In a handful of cases the market is rejected and Commissioners, Ministers and sometimes even management are enthroned. This is not an attitude which we like.

7.0 p.m.

Mr. Peter Hordern: (Horsham): I wish at the outset to correct a point made by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph). When referring to Edwards High Vacuum he said that the company had been taken over by Varian Associates. In fact, the company, which is in my constituency, had a bid made for it by Varian Associates, but it was subsequently acquired by British Oxygen at a lower price. That is the whole point.
I am pleased that the House has been given an opportunity to discuss this Statutory Instrument, the first of its kind to have been discussed in this way on a Monopolies Commission's Report. The debate takes place at a particularly interesting stage, since the findings of the Monopolies Commission on the proposed

Rank merger have been rapidly nullified by the forecasts of the De La Rue Company, announced last week.
First, however, I wish to refer to the conclusions in the Monopolies Commission's Report and deal with some of them specifically. Paragraphs 81-82 of the Report state:
We have next to consider whether, if the proposed merger takes place, the fact of the two enterprises having ceased, in the circumstances of the case, to be distinct enterprises, operates or may be expected to operate against the public interest and in doing so to take into account all matters which appear in the particular circumstances to be a relevant Appraisal of the public interest in the effect of mergers can include their effect both on competition and on efficiency.
It may be thought that the term "public interest" is wide, but it was surely never remotely considered—certainly not during the passage of the Monopolies Act; the Minister of State and I took part in those debates—that the public interest could involve an appraisal—a necessarily subjective and speculative appraisal at that —of the future efficiency of the new organisation, because if that is accepted, then we must also accept that a Government-controlled body can examine, assess and promote any move that the Government judge to be in the public interest and, further, can thwart any move which they judge not to be in the public interest.
The second of these two propositions is even more important than the first. The first has been carried through by the I.R.C. But the power to thwart a proposed merger, because of what the Government consider to be the public interest, is a matter of even graver importance
If this practice is once accepted it is surely the height of inefficiency to stop there. The public interest should demand the total abolition of the market system and the imposition of State control and direction. I have no doubt that that is what many hon. Gentlemen opposite want. It is a system which is indistinguishable from that which applies in any Communist State and—

Mr. Speaker: Order. The hon. Gentleman must address his remarks specifically to the Instrument under discussion.

Mr. Hordern: I will only add, Mr. Speaker, that I welcome the distinction between hon. Members opposite and ourselves. It draws a sharp dividing line


between the two sides of the House. Hon. Gentlemen opposite think that the public interest demands the close involvement of the State in all these affairs. My hon. Friends and I believe that the public interest demands that these affairs should Pe left alone unless a clear monopoly situation arises.
We are faced with a general proposition by the Monopolies Commission in this Instrument. It is that the Commission's knowledge is superior to that of the market. In fact, this point is specifically made in its report, for paragraph 82 says:
 … the Commission may, and probably will, have more information than the market on which to base an assessment of the likely outcome.
That was a big claim on the part of the Commission, but it resulted in some rather bad luck for the Commission. for its claim was demolished quickly by events.
Hon. Members will recall what happened. Rank offered shares and loan stock to the total value of £43 million for De La Rue. This was equivalent to 69s. 8d. per share. If the shareholders had been allowed to accept the bid, their holdings would today have been worth 80s. or £49.3 million altogether. Instead, as a result of the revised forecasts of the De La Rue Company, they are worth less than half; that is, 36s. 6d. or £22.5 million.
Even worse, the Monopolies Commission must have accepted at face value the De La Rue forecast made at the time of the original bid. It is perhaps reasonable that it could not have foreseen the explosion in the chipboard factory. However, it at least accepted the forecast for growth in central heating and it also accepted the forecast of growth in the Giro system. It did not, however, foresee the snags in the design of the cash dispensing machines. But how could it have foreseen those events? The claim to be able to assess efficiency is blatantly absurd and I hope that we will never hear such nonsense again.

Mr. Dell: Would the hon. Gentleman help me by commenting on two points? First, would he say how the market could have foreseen those events? Secondly, does he take any account in his argument of the possible effect of the shareholders of Rank paying too much for the equity of De La Rue?

Mr. Hordern: The Minister makes a valid point in asking how the market could have assessed this loss. The market could not conceivably have assessed precisely how these affairs could have gone, but it is a risk that it takes. In fact, these risks occur with every company. If they did not, share prices would not move at all. But why should the Government take on that responsibility, through confirming what the Monopolies Commission reported? This is the difficulty in which the Government are placed. They accepted a recommendation of the Monopolies Commission and their authority has been bruised by subsequent events.
The Minister's second question, about the possibility of over-payment by Rank, is speculative. It is a forecast of what might have happened. After all, if Rank had succeeded in the bid, these disasters might not have occurred. One cannot say what might have happened.
We know, however, that the Monopolies Commission was prepared to go as far as to deprive the shareholders of the De La Rue Company of the chance of accepting a higher price for their shares than the market thought their shares were worth under the De La Rue management. Although Rank was sure that it could use the De La Rue assets more profitably than the De La Rue board itself and was prepared to back its judgment with cash—the Monopolies Commission decided that Rank was wrong and should be prevented from trying to prove its point. This must be regarded, therefore, as a positive intervention of the very worst kind; and the result, of course, is that the De La Rue shareholders lost out.
I hope that it is not too old-fashioned a view to take—I do not care very much if it is—but I believe that if a willing buyer meets a willing seller, the business that they decide to do should not be thwarted by an outsider, however powerful, unless it can be shown beyond doubt that what is proposed would be damaging to the public interest.

Sir K. Joseph:: My hon. Friend will remember that the willing buyer had not yet been shown in that the bid had not been accepted at the stage when the Government stepped in.

Mr. Hordern: I: think that my right hon. Friend is assuming that Rank


would not have gone ahead with the bid, and that is speculation.
The Government have found it necessary to lay a Statutory Instrument which, if the managing director of the Rank Company had given an indication that the company was not prepared to go through with its bid, would not have been necessary. Thus, what has occurred must constitute a serious blow to the rights of shareholders and must begin to nullify the whole market system.
There is no reason for the existence of the market system if one accepts that a State corporation should act directly on what it considers to be grounds of efficiency. This is not only wrong in principle, but absolutely wrong in practice, and I have never seen in any Government paper a more implausible argument or one which displays such an ignorance of the market than the statement in paragraph 82 of the Report, in which the Commission tries to separate the shareholders' assessment of a company's efficiency from the price of the company's shares.
It does more than that because, in effect, the Commission says that the market's assessments of a company's prospects, which are reflected in share prices, are entirely wrong and that the Commission is right. They are prepared not only to deny the shareholder the higher price for the shares, but to deprive other companies of the support which the shareholder could have given them had he been allowed to receive a higher price for the shares.
The report, in paragraph 82, makes the point that there is the possibility that cash may he received by the company bid for instead of shares. That is so. In retrospect, it now looks like an advanced price, which could have been used for investment in industry, to the great benefit of industry. Instead, on its unproven assessment of efficiency, the Monopolies Commission has deprived industry of the support it could have had, which is a high price to pay. If the result is unjust, damaging and arbitrary, the reason given for not allowing the bid is pathetic.
Paragraph 60 refers to the ballot held among senior executives by the solicitors to the company. Surely, the idea of

holding a ballot amongst higher executives to decide whether they should be taken over or not will be used by every inefficient company whenever a bid is made for it and whenever there is any fear among the higher executives of losing their jobs. This is bound to check expansion of any efficient concern of any size.
It does not much matter what the present Government think. It does not really matter, in the long run, what the Monopolies Commission thinks, because all that can be changed. What does matter is what the Conservative Party thinks, and what the country needs is a clear and definitive statement of our policy on monopolies and mergers. But waiting for Conservative policy on these matters is rather like walking into Tutankhamen's tomb. The silence is golden, but it has gone on rather a long time and it is becoming a shade oppressive.

7.12 p.m.

Mr. Dell: Three points have been made in the debate which I can sum up. First, why was the public interest involved in this merger? second, why should we have prohibited the market from being the judge of efficiency in this case? third, there is the specific reason given by the Monopolies Commission for deciding that the merger would be against the public interest, and summed up in paragraph 60 of the Report—that is, the reaction of the management of De La Rue to the offer. I hope that I can make a few comments on these three points within the rules of order to elucidate the Government's thinking on these matters.
First, why was the public interest involved in this merger. even though it did not involve a monopoly situation? This would have been a conglomerate merger. The right hon. Member for Leeds, North-East (Sir K. Joseph) said that such mergers could increase to an extent which would create problems. I do not want to claim that conglomerate mergers are in every case bad. On the contrary, I take very much the attitude of the right hon. Gentleman—that many would add to the prosperity of the country. They have many positive characteristics which are referred to in the annexe to the Monopolies Commission's Report. Nevertheless, there are problems, and problems arising from size.
It is understandable that people should tend to say that problems of market size can arise only in monopoly situations. I think that is wrong. A monopoly situation is defined in our legislation. A statutory monopoly is that which controls one-third of the market. It is a guide, but it would be wrong to suggest that these are the only situations in which the improper use of market size can arise. For example, in a conglomerate, particularly a large one, it is possible for there to be a transfer of resources within a company in order to strengthen one part of the company in a way which would not be available to a specialised firm, which might nevertheless be more efficient.
But then we come to the possibility of increased disclosure, which the right hon. Gentleman mentioned. Indeed, one of the dangers in conglomerates is that one may not have this disclosure about particular segments of a firm which may be inefficient but whose inefficiency is concealed by profits arising in other sections of the firm.
If one could deal with that situation entirely by increased disclosure, this would certainly help. But that is not the situation at the moment. We do not have the legal structure to ensure all necessary disclosures in cases such as this. Perhaps we should. The right hon. Gentleman will have noted that the commission in its report specifically proposed that there should be increased disclosure. That matter is currently being discussed. But increased disclosure is not yet with us.
Second, I remind the right hon. Gentleman that there can be difficulties about increased disclosure—difficulties which should not be under-estimated and which arise particularly in the case of conglomerates. Therefore, although one could attempt by increased disclosure to get over some of these problems, one cannot get over them entirely.

Mr. Hordern: Will the hon. Gentleman explain the difficulties which conglomerates would find in revealing information in the same way as any other company?

Mr. Dell: It is a question of defining in law the necessary requirements for disclosure. Under the Companies Act, 1967, companies are allowed to decide for themselves the different sections into

which they will divide the information they give to the public. The question is how one can define in law the requirement to ensure the necessary disclosure to reveal the full activities of a conglomerate. But I accept in principle that much of this problem would be overcome by increased disclosure. The commission made that recommendation, and we are now investigating how far we can meet it.

Mr. Terence L. Higgins: As I understand it, the Minister of State's objection to a conglomerate in these circumstances is that one part might be subsidising another part and in this way giving the second part some advantage in terms of the market. Surely this, if it were to happen, would only give a temporary advantage—a long purse advantage, as the jargon calls it—to the second part and even if it drove its competitors out of business, in these circumstances, as soon as it ceased to be subsidised in this way, new competitors would come in again.

Mr. Dell: But that would be a very long process and considerable damage would have been done to the public interest in the interval.
The hon. Member for Horsham (Mr. Hordern) suggested that, when the size criterion was put into the Monopolies and Mergers Act, 1965, no one remotely considered that questions of efficiency might be referred to the commission. I do not think that that was the case because, in our monopolies legislation since the beginning, in 1948, questions of efficiency—admittedly within a monopolies context—have been involved. In Section 14 of the 1948 Act many questions involving efficiency were specified as being related to the public interest.
Equally, within the March, 1964, White Paper, which was published by right hon. Gentlemen opposite, again admittedly within the context of a monopoly situation, questions of efficiency were introduced as being related to the public interest. Paragraph 24 of that White Paper said:
 The Government contemplate directing the Commission's attention to certain considerations to which it should have regard in particular cases in assessing where the public interest lay. They have in mind such consideraions as efficiency, technical and technological advance, industrial growth and competitive power in international trade ".


What I do not understand in the argument of right hon. Gentlemen opposite is why these questions of efficiency and questions relating to our export trade and to the efficiency of supply in the home and export markets have to be confined to a monopoly situation. I should have thought that these questions were relevant whenever one was considering the use of large quantities of national resources.

Mr. Hordern: The hon. Gentleman has specifically said that in the White Paper this question arose only in the case of a monopoly situation. In this case it does not apply, because the merger would not have led to a monopoly situation, and the report does not claim that it would. Surely the position ought to be that where competition is allowed and is seen to be practised there should be no interference by the Monopolies Commission or the Government in preventing that competition from obtaining. But it is perfectly allowable if the monopoly situation exists, when the Government have a perfect right to see that the criterion of efficiency is properly considered.

Mr. Dell: The hon. Gentleman has repeated his point of view rather than replied to mine. When one is concerned with the use of large quantities of resources, I cannot see why these questions, which are clearly related to the public interest in a monopoly situation, are not equally relevant to the consideration of the public interest in that merger.

Sir K. Joseph: The answer is that if there is no monopoly situation, market competition will see that efficiency prevails. There is no need for a tribunal if competition and the market operate. We acknowledge that there is a need for a tribunal in a monopoly situation.

Mr. Dell: That would be perfectly true if one could rely in every case—I grant that one can in most cases—on size not detracting from the competitiveness of the situation. I gave the example of the transfer of resources within a company in which size itself could affect the competitiveness of the situation.
I conclude this point by saying that conglomerate mergers are not necessarily

bad; on the contrary, they have advantages. But the Monopolies Commission's conclusion seems to be right. It is in essence that while there are dangers which should be closely watched by the Government and the stock market, they should not dispose the Government against conglomerates and against the creation of organisations of great size. That is the view of the Government and I think that it is the right view.
The second question I was asked was why this merger should not be judged against the normal criterion by which these mergers are decided, the criterion of the market. The right hon. Gentleman said that we had accepted the criterion of the market in virtually every case; that of all the mergers which had come before us since the Monopolies and Mergers Act, 1965, about 400, only 12 had been referred—or perhaps 13 today—and that of those the commission had rejected four. In other words, the mergers had been decided by the criterion of the market.
The right hon. Gentleman paid tribute to my right hon. Friend, then President of the Board of Trade, for having allowed the market to determine the results in all these mergers. I will convey the tribute to him, although I do not think that he had to stand up against the pressure which the right hon. Gentleman suggested. As the right hon. Gentleman himself said, the Government have done quite a bit to encourage mergers. We accept the market as a fairly efficient mechanism in most cases. Indeed, quite apart from anything else, practicality dictates that the large majority of judgments of this kind must be left to the market.
But it is too great an expression of faith to believe that in all circumstances other than monopoly the market will be the best judge and that detailed examination of the case with access to information from both sides cannot do it better. Therefore, where the public interest appears to be involved to any significant extent, it is right to make a reference.
The fact is that the market lacks information. Indeed, the company proposing to take over another company may lack information. The right hon. Gentleman has argued, and I agree, that we need more information about the existing situation. Much of the additional


information which we need is not available. The Companies Act, 1967, has not satisfied the demand for additional information about the activities of companies, the demand which exists not just for additional information but for more scientific analyses of the information which is available.
It must therefore be accepted that the market lacks information, information of an interesting kind, because it is the information which right hon. Gentlemen opposite themselves suggest can be made available and presumably, therefore, could be made available as the result of an inquiry by a body such as the Monopolies Commission.

Mr. Hordern: However, would not the hon. Gentleman agree that even if the information were readily divulged, as it was to the Monopolies Commission in this case, the assessment of that information can be imperfect? Would he address himself to this point? Why was it strictly necessary for the Government to lay the order? The position has greatly changed since the matter was originally considered by the Monopolies Commission. If the board of Ranks wished to go ahead with the take-over, to make a bid for De La Rue, it would have been perfectly entitled to do so if the Statutory Instrument had not been laid. Why do not the Government allow it to do so?

Mr. Speaker: The hon. Gentleman has already made one long intervention which was practically a second speech; interventions must be brief.

Mr. Dell: The hon. Gentleman asks me why we are now preventing this merger from going forward in what he says are changed circumstances. I intended to come to that. At this point I merely say that it is not an unusual experience in my reading of company reports to learn of chairmen who have carried through take-overs and are explaining to their shareholders that the situation has turned out to be much worse than they expected and that the profits of their company—and, therefore, their use of national resources—have suffered as a result.
One of the interesting things in this report and one answer to what the hon. Gentleman said about the report having been undermined by the De La Rue

results, which have been made public in the last few days, is that in paragraph 105 of its report the Monopolies Commission said that in its view Rank was underestimating the difficulties in which it would get involved in this merger. I suspect that this is something which chairmen of companies of ten do.
Therefore, it is wrong to say that the market has all the necessary information, or is in a better situation to have the necessary information than is a body specially appointed to inquire into this sort of situation. I admit that we allow the operation of the market to settle virtually all cases, but I have seen mergers, and the right hon. Gentleman has probably seen them in more detail, when the market has permitted what has consisted of one company running into the arms of another out of the embrace of a third, in a situation in which it was clear to any independent observer that it was the third which would have created the more efficient total company. That is something which the market allows, and all I am suggesting is that there is merit where the public interest is involved, but only where the public interest is involved, in having an independent body which investigates these matters.
There is one further interesting point on the operations of the market. We are not here discussing the Allied Breweries/ Unilever merger, but the market made two distinct judgments of the prospects of that merger at an interval of about five or six months. Had the merger taken place it would have committed the long-term resources of those two companies. At one point the market decided that it would be a good thing, and later decided that it would not.

Mr. Speaker: We must come back to this particular merger.

Sir K. Joseph: Had the then President of the Board of Trade not delayed his decision for eight or 12 weeks, quite different events might have supervened.

Mr. Dell: The right hon. Gentleman may or may not be right. That would introduce the possibility of yet a third attitude of the market in relation to the same merger.
The third point on which I should like to comment is that made by the hon. Member for Horsham on the argument in


paragraph 60 of the report dealing with the attitude of the management of De La Rue. It was not just the Monopolies Commission or De La Rue that placed emphasis on the importance of management; Ranks placed importance on obtaining the management of the company. Paragraph 40 of the report quotes Rank's own words:
 In making a bid for De La Rue, the Rank Organisation sought to acquire with its existing management a company …>
Rank also regarded this question as important, and, therefore, on the base of Rank's own statement of position, this was a legitimate aspect for the Monopolies Commission to concern itself with.
I would have thought that if there is any area in which it is important to get management it is in a conglomerate merger, because a conglomerate merger, by definition, is a type of merger in respect of the future prospects of which and in respect of the type of management of which the taking over company has less experience than it has in horizontal or possibly vertical mergers. This, then, is a vital point which it was legitimate for the Monopolies Commission to take into account. In taking it into account, I would have thought that the commission was influenced not just by the poll but by its contact with De La Rue over the full period of its investigations, and I think that both sides of the House could concede the following points.
First, this was a particularly strong panel of the Monopolies Commission. Second, Mr. Roger Falk and Sir Hugh Tett, who dealt with this problem, are not unaware of the dangers in allowing management to veto mergers. They would have been perfectly well aware of the existence of such dangers; yet they decided that those dangers were to be balanced against even greater dangers on the other side.
This does not mean that it is the view either of the Government or of the Monopolies Commission that executives should be allowed to veto all mergers in all cases. Executives of the company are important, but the problems of a merger and the influence of the executives in a particular company on a merger have to be decided on the merits of each case. In this case the position of the executives was par

ticularly critical and it is not necessarily a precedent for other cases.
I hope that I have dealt with the points raised by the right hon. Gentleman and the hon. Gentleman and that the House will approve the order.

Question put and agreed to. Resolved,

That the Restriction of Merger Order 1969 (S.I., 1969, No. 1134), dated 6th August 1969, a copy of which was laid before this House on 11th August, in the last Session of Parliament, be approved.

Orders of the Day — CUSTOMS (IMPORT DEPOSITS)

7.35 p.m.

The Financial Secretary to the Treasury (Mr. Dick Taverne): I beg to move,
That it is expedient to authorise the extension by one year of the period for which duty under section 1 of the Customs (Import Deposits) Act 1968 may remain in force, subject to the like exemptions and reliefs as were provided for by that Act but with the amount of the duty reduced as from 5th December 1969 from fifty per cent. to forty per cent. of the value of the goods on which it;s charged.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
It falls to me at this unexpectedly early hour to move the Ways and Means Resolution concerned with the Customs (Import Deposits) Bill. The Resolution provides for the import deposit scheme to be extended for a further 12 months from 5th December 1969, but at a reduced deposit rate of 40 per cent., as the Chancellor of the Exchequer announced in a statement on 21st October. The Resolution also provides for all the existing exemptions and reliefs to be continued. It therefore has two features: first, the extension of the previous scheme by another 12 months; and, secondly, a reduction of the rate, but in due course 1 hope that it will be possible, under the terms of a Bill which will be introduced if the Resolution is passed, to reduce the rate or to end the scheme before the 12 months' period expires.
The Resolution is so drafted as to have statutory effect pending the passing of he necessary Bill. This is precautionary, in case the Bill should not be passed before the expiry of the existing charge, but the


Government's present intention is to provide time for all the stages of the Bill before 5th December.
The reduction of the deposit rate does not take effect on the passing of the Resolution, but on 5th December. If there should be a gap before the enactment of the new Bill and after the expiry of the present Act, there will be under the Resolution a continuation of an existing charge, and the legal difficulties which arose last year on the Ways and Means Resolution under Section 3 of the Provisional Collection of Taxes Act would not in this case, I am informed, arise. It is the intention to publish the Bill tomorrow morning.
A preliminary statement of the reasons for the continuation of the scheme was given by the Chancellor of the Exchequer. Perhaps it would be appropriate for full discussion of this Measure to take place on Second Reading which has been announced for next Monday, and perhaps it would also be appropriate and convenient for me to reserve my main exposition until that date. I shall, of course, be glad, with the permission of The House, to answer any particular points which may be raised on the Resolution.

7.38 p.m.

Mr. Terence L. Higgins: May I begin by congratulating the hon. and learned Gentleman on his elevation to the post of Financial Secretary to the Treasury.
The hon. and learned Gentleman said that it fell to him to move the Resolution. I can understand if he felt that he should display some diffidence in doing so, because, in moving the Resolution, we do not want so much an explanation as an apology. When, last year, a similar proposal was introduced, it was made abundantly clear that it was intended to be temporary rather than long-term. I feel that there is a danger that, as with the successive Prices and Incomes Bills over the years, this proposal may become an annual festival.
I hope that that will not be so, but we are not taken in by the Financial Secretary's saying, "If it is possible to end the import deposits scheme before the end of the year we shall certainly do so", because exactly the same view was expressed last year.
While I agree wholeheartedly that we should defer discussion of the merits or otherwise of the Bill we should not forbear from quoting the statement made by the hon. and learned Gentleman's predecessor on 28th November when he said that the import deposits were
 temporary in impact and in intention, the idea being to make a sharp immediate assistance to our export-import ratio, to give time for the major strategy … to take effect. It in no way derogates from that strategy. It is in no way a substitute for that strategy. It is a measure timed to ensure that imports do not get out of hand and tend to come down while that strategy is working."—[OFFICIAL REPORT. 28th November, 1968; Vol. 774, c. 751.]
We cannot see how, in the present circumstances, there should be a repetition of this measure which the Financial Secretary clearly indicated was intended to be temporary.
It is worth looking at the context in which the original measure was introduced. On 22nd November, in the statement which was the prelude to the scheme, the Chancellor of the Exchequer said:
 The scheme is not one which can or should be kept in being for more than a limited period, but it will have powerful effects over the next few months … "—[OFFICIAL REPORT, 22nd November, 1968; Vol. 774, c. 1796.]
But, instead of its having
 powerful effects over the next few months 
first, it is by no means clear precisely what effects it has had, and, secondly, 12 months afterwards the Government introduce this Resolution which is designed to perpetuate the scheme for many more than the "next few months" to which the Government referred this time last year.
There are one or two preliminary questions which we should ask the Financial Secretary tonight before the much broader debate which we shall have next week. First, the scheme was introduced in the atmosphere of the international monetary crisis of November, 1968. It is one of the measures designed to cope with that crisis. Meantime, we have had two major changes: devaluation of the French franc, and up-valuation of the German mark. One would not have thought that a crisis measure necessary in November, 1968, should be perpetuated by this Resolution.
The second point on which I must press the Minister for a reply concerns the legal


position. When this question arose last year, it seemed clear to us on this side of the House that the introduction of the import deposits scheme was in conflict with our international obligations under the General Agreement on Tariffs and Trade and the European Free Trade Area Treaty. It would be wrong for the House to pass this Resolution without being clear about the legal position of the Government's proposal.
Last year we heard from the Attorney-General, for whom I have great personal admiration, what I think was the least convincing argument that I have heard him put forward. I will not burden the House with the semantics in which he engaged, but the Government's appeal was that the imposition of an import duty was not contrary to our G.A.T.T. or E.F.T.A. obligations, and, despite the Attorney-General's assurances, the Government asked us to accept that the right tribunals for deciding whether it was contrary to those two treaties were the appropriate tribunals established by those two treaties. Before approving this Resolution, we should have a clear statement from the Financial Secretary on what the decision of those tribunals was when the matter came before them after the imposition of the scheme last year.
Secondly, I hope that the Financial Secretary will be able to tell us precisely what prior consultations the Government have had with the other members of G.A.T.T. and E.F.T.A. about the extension of the import deposits scheme. It is apparent that last year the Government were anxious not to appear to be taking protectionist measures or doing anything which might lead to a reduction of world trade or a series of tariff wars which would curtail world trade and consequently reduce the level of British trade. There must be renewed concern in G.A.T.T. and E.F.T.A. about the Government renewing the scheme which they said would be temporary. Could the Financial Secretary tell us what consultations have taken place with these two bodies and what their replies have been?
I make only two further points. First, the Financial Secretary will be well aware that the impact of the import deposits scheme was intended to accentuate the credit squeeze, and this is con

tinuing within the Government's general policy. But he will also appreciate that there is grave concern among small and medium businesses about the situation which may develop in the winter.
This scheme, tightening the general credit squeeze, will have an effect on a number of small and medium companies. But it could have a very traumatic effect on small and medium importers, because this measure has added to the normal cost of the capital which they employ a further charge, which effectively means that they are borrowing the money to lend it to the Government on an interest-free basis, but are having to pay interest, not only on their own working capital, but on the additional loan which they are making to the Government.
That is something which small and medium importers, or perhaps even large importers, can reasonably cope with for a short time, but if it is continued for longer than 12 months, which this Motion enables the Government to do, a number of importers who are in viable businesses in normal circumstances, carrying out a task which is useful to the community, will find themselves in very serious difficulties and may eventually, if the credit squeeze continues, be forced into bankruptcy.
I have had representations from a number of such businessmen who have stressed that in the present difficult conditions, with the very high interest rates being charged to them, the requirement to finance their own capital and in addition to provide an interest-free loan to the Government is seriously jeopardising their future viability. This is an imposition on this group of people which cannot be justified beyond a very short time.
Finally, I refer to the Resolution on the Order Paper. I am sorry that we have again reverted to this form of presentation, and I express our thanks for the tremendous amount of work done in the Vote Office in running off these documents every day. The Resolution reads:
 And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968 ".


I accept the Financial Secretary's point, but concerning the exemptions the Resolution says:
… section 1 of the Customs (Import Deposits) Act 1968 may remain in force, subject to the like exemptions and reliefs as were provided for by that Act but with the amount of the duty reduced … to forty per cent. …
It has become not so much an unfortunate lapse, but rather a nasty habit of the Government that they draw Resolutions in such a way that they curtail debate on perfectly legitimate matters of constituency concern to many right hon. and hon. Members.
I therefore ask the Financial Secretary a specific question: would I be right in thinking that the Ways and Means Resolution will not reduce the scope of debate to a degree that it is less than we had last year'? In other words, is this a more restrictive Resolution than last year's Resolution? That one was restrictive, but if we are not to be allowed to go into some of the details of the effects of the scheme on matters which affect individual constituencies it will be extremely wrong. I therefore hope that the hon. and learned Gentleman can assure us that this Resolution is not more restrictive than last year's and that if we want to examine the situation after a year's operation of the scheme we shall have full scope, if the Resolution is passed and the Bill is given a Second Reading, to amend the Bill to extend the present exemptions to take account of the serious effects which this measure may have on a great many parts of industry.
It would be wrong of me to delay the House further. We on this side think that it is completely wrong for the Government to introduce a Resolution of this kind which enables them to perpetuate a scheme which on their own admission was intended to have effect over a period of a few months. We shall return to this point on Second Reading of the Bill, but for the moment I hope that the Financial Secretary will answer the questions which I put to him.

7.50 p.m.

Mr. Taverne: Perhaps I may deal briefly with some of the points which have been raised, but I am sure that the hon. Member for Worthing (Mr. Higgins) will appreciate that it would be more appropriate to deal with major questions, such as the effect on the liquidity of

various importers, not at this stage but during the Second Reading debate next week. The hon. Member referred to remarks last year which stressed the temporary nature of the scheme, and I expect him to make the most of this in the debate when we have it in due course. No doubt, this is a matter that we can deal with then.
I should like to deal specifically with two major points, one concerning the legal position and the other on the scope of the resolution. As to the legal position, in 1968 G.A.T.T. was advised by the I.M.F. that the scheme did not go beyond the measures required in the light of the United Kingdom's circumstances, and that advice was accepted. Legally, therefore, in the case of G.A.T.T., the scheme was last year in the clear.
E.F.T.A. decided to keep the effects of the scheme under review, without prejudice to the issue of whether it was consistent with the provisions of the Stockholm convention. On this occasion, the G.A.T.T. Council has decided once again to consult the I.M.F. about the scheme. A meeting of the E.F.T.A. Ministerial Council was held last week on 6th and 7th November. That Council expressed concern at the continuation of the scheme and it was agreed that it would keep it under review in the course of the next six months. The communiqué which was issued subsequently, however, made no reference to doubts about the legality of the scheme.
The Council—the body concerned in E.F.T.A. with the legality or otherwise of the scheme—is keeping the scheme under review and has made no mention of doubts about its legality.

Mr. Higgins: Surely, this is a very unsatisfactory situation. As I understand the hon. and learned Gentleman, last year the appropriate E.F.T.A. body decided not to make any decision whether the scheme was contrary to the treaty. Now the hon. and learned Gentleman says that again the matter has been deferred. In view of the determined way in which the Attorney-General said that the scheme was legal, I should have thought that in the interest of the United Kingdom the Government would have expected a firm decision one way or the other.

Mr. Taverne: My right hon. and learned Friend the Attorney-General


expressed the view of the Government that the scheme was legal. The question whether to question its legality was a matter for the E.F.T.A. Council. In the last communiqué it has not raised the matter of its legality. Therefore, this is not a matter of great concern to the House in considering the resolution.
I come finally to the scope of the Resolution. The interpretation of what may be permitted by way of amendment is a matter for the Chair, but as I understand the effect of the Resolution it is specifically to carry out what my right hon. Friend the Chancellor of the Exchequer proposed and to do no more.
What my right hon. Friend proposed, and what, therefore, the Resolution is designed to carry out, is to continue the existing scheme and to provide for a variation in the rate. It authorises the extension by one year of the period for which the duty may remain in force
 subject to the like exemptions and reliefs as were provided for by that Act ",
which, I understand, means that there will be full discussion of the grounds on which the continuation of the scheme will be accepted or not, and objections about the effect can, of course, be raised on Second Reading.
As I understand it, however, since the Ways and Means Resolution states that it
 may remain in force, subject to the like exemptions and reliefs ",
the scheme as a whole would be subject to the same exemptions as last year and, therefore, this would not be the same debate as we had last year with questions concerning detailed exemptions. This is not the imposition of a new scheme. It is the continuation of the previous scheme which was fully gone into that year.

Mr. Higgins: This would be a very bad way of doing it, because the whole point about last year's Bill was that it was supposed to come to an end at the end of the year and could not be extended by Statutory Instrument, the intention being that if it were to be reintroduced, we would have a new Bill and we should reopen the whole question. Surely, in those circumstances it is most irresponsible of the Government not to introduce a Ways and Means Resolution

which enables one to examine the impact on individual groups of constituents who may be affected.
I hope that if that is so the Government will look again at the Resolution and if necessary, introduce one which would enable us to debate points of great constituency interest to many of my right hon. and hon. Friends.

Mr. Taverne: There is nothing whatever to prevent those points being raised during the opposition, if there is opposition, to the Second Reading, but it would be straining considerably the purpose for which the Bill is introduced if the resolution went beyond the precise purpose proposed by my right hon. Friend the Chancellor of the Exchequer, namely, to continue the same scheme in existence for another year, subject to the powers which exist to reduce the rate below 45 per cent. and to terminate the scheme earlier.
It is, therefore, a termination of the former scheme which is being proposed with the powers which the Treasury has to make orders concerning particular products. It is not, I understand, a proposal which would lead to reconsideration in terms of amendments of the various measures that were proposed last year.

Question put and agreed to.

Resolved,

That it is expedient to authorise the extension by one year of the period for which duty under Section 1 of the Customs (Import Deposits) Act, 1968, may remain in force, subject to the like exemptions and reliefs as were provided for by that Act but with the amount of the duty reduced as from 5th December, 1969, from fifty per cent. to forty per cent. of the value of the goods on which it is charged.

And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1968.
Bill ordered to be brought in upon the said Resolution by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. John Diamond, Mr. Dick Taverne, and Mr. William Rodgers.

Orders of the Day — CUSTOMS (IMPORT DEPOSITS)

Bill to extend for one year the period for which the duty imposed by the Customs (Import Deposits) Act 1968 may


remain in force subject to the like exemptions and reliefs as were provided for by that Act, but to reduce the amount of that duty from fifty per cent. to forty per cent. of the value of the goods on which it is charged; presented accordingly, and read the First time; to be read a Second time Tomorrow and to be printed. [Bill 14.]

Orders of the Day — APPLES (IMPORT QUOTA)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. James Hamilton.]

7.58 p.m.

Mr. Richard Body: It is with some diffidence that I wish to raise on the Adjournment a matter concerning the Minister of Agriculture.

Mr. Peter Mills: Where is he?

Mr. Body: You will realise, Mr. Deputy Speaker, that my hon. Friend the Member for Haltemprice (Mr. Wall) has been suddenly struck down with sickness and is not able to initiate his Adjournment debate, but I have given notice to the Minister of Agriculture that I would wish to raise on the Adjournment the question of the quota on imports of apples.

Mr. Deputy Speaker (Mr. Harry Gourlay): Order. It is correct that any hon. Member who catches my eye on the Motion for the Adjournment of the House is entitled to be heard if he raises a proper subject and one which, of course, does not involve legislation. There is, however, a convention, which Mr. Speaker and his predecessors have mentioned and the breach of which they have deprecated, that an hon. Member ought not to raise a subject with notice and without having a Minister or someone else present to reply.
The convention proceeds from the idea that the House should be placed in possession of both sides of any grievance. There are, obviously, disadvantages in raising a new subject without securing the attendance of a Minister. That is the convention. I can only deprecate it if it is not observed on this occasion; I have no power under Standing Orders

to prevent from speaking an hon. Member who has caught my eye. However, I must reiterate that it is a practice which the present and previous Speakers have very seriously deprecated.

Mr. Body: I realise that, Mr. Deputy Speaker. Perhaps I may be allowed to point out, although I was not here at the time, that on Friday the Minister who replied to the Adjournment debate did not arrive until the conclusion of the speech made by the hon. Member who had the Adjournment.
As I said at the outset, it is with very great diffidence that I raise this matter. I realise that the Minister of Agriculture could scarcely have had less notice. Indeed, it was only, I think, half an hour ago that I gave him notice of this, and I appreciate that it may be difficult for him to reply fully to a debate now. However, I feel that this matter is of very great seriousness to many hundreds of growers who may be crippled this season and be driven out of business unless something is done. Were it not for that fact I most certainly would not be on my feet now addressing you, Mr. Deputy Speaker.
I repeat that it is of the utmost diffidence that I do this; I realise that the Minister, given half an hour's notice, is put in a most difficult position, but I wish to make the point that the right hon. Gentleman the Minister of Agriculture is fully seized of this problem. His colleague, the Joint Parliamentary Secretary, was answering Questions on this subject on Wednesday, and he was present at Question Time and overheard the exchanges, and we know that tomorrow morning there is to be a discussion on this very subject and, moreover, the right hon. Gentleman himself will be present there. I am quite convinced that, as a conscientious Minister, he will by now have marshalled the arguments and considered the problems of the growers.
I am very grateful to see the Parliamentary Secretary here now. I repeat that I realise that I am thrusting upon him a difficult task. All growers will appreciate that at very short notice he has come forward to answer on this matter. It was he, of course, who dealt with the Questions raised on Wednesday, and he is, therefore, in a position to say something more about the problem tonight.
On Wednesday, the hon. Gentleman was able to say that the market quota for this year would be the same as that for last year, 15,200 tons. I know well enough that the Minister of Agriculture is not responsible for quotas, and I am not seeking to raise that point, but I hope that I shall have said enough to convince the Parliamentary Secretary of the need to persuade the Board of Trade that there are hundreds of growers who will be in a desperate situation in the coming months unless that quota is re-examined and cut.
I wonder to what extent the Government and their intelligence service are up to date with the present system of prices. I hope that since Wednesday, when certain figures were given here, the hon. Gentleman has been able to find out the kind of prices. He will, perhaps, have learned by now that there are growers —in Leith—who are receiving only 2d. a lb. for their apples. We on this side have been saying again and again—

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy): Perhaps the hon. Member will allow me to point out that it is not sufficient to say that growers are getting only 2d. a lb. for them. Perhaps he would like to give me some examples, so that I can look into them. I looked into the one given before.

Mr. Body: I appreciate that, and I am not saying for a moment that the hon. Gentleman does not look at the matters which are drawn to his attention. All of us who are consistently bringing up the problems of growers know that he examines these problems with some care, but the fact is that growers have received during these past weeks prices far below the cost of production. I gave the figure of 2d. a lb. I concede straight away that they may not be the best quality apples, but they are apples which are costing 6d. a lb. to produce. It is this figure which I ask the Parliamentary Secretary to bear in mind.
We on this side of the House have said so often that farm-gate prices are no better than they were 15 years ago, and they are not. Indeed, for many commodities they are going down, yet all the time costs are rising, and rising very considerably. What I ask the Parlia

mentary Secretary to do is to examine the figures which we are able to provide for him and to confirm that it is a fact that market prices are woefully low this year.
We know the reason for it. He knows the reason. We have had a most splendid crop of apples, perhaps one of the best crops for very many years. It is, unfortunately, possible that many of these apples, although of good quality, may not have keeping quality as well. This is why it is all the more important that they should find a market quickly. This is not to say that the apples are not of good quality. On the contrary, they are first-class apples, but so often when there is a crop of this magnitude and in these conditions they may not have that lasting quality which is necessary when there is such a huge crop.
This is of enormous importance when one considers the quota, and this is why I urge the Parliamentary Secretary to consult his colleagues in the Board of Trade to make sure that the apple quota is realistic during the coming months. It should be drastically cut, for unless it is cut, so that our own growers are able to get fair prices, many of them will be in a very serious plight indeed. I do not think that one can exaggerate their position.
Many of the growers are specialists, but some of them are horticulturists on a wider front. Horticultural prices generally have been very poor in the past few years and they have not improved. Horticultural costs have mounted year by year. I cannot think of any commodity, any crop, grown by horticulturists, which is not far more expensive to grow than it was a few years ago. The Parliamentary Secretary knows how some of these costs have risen and he knows the figures. I hope that he knows, also, that the prices which our growers are getting are now no more than they were several years ago. This is serious. I hope that the Parliamentary Secretary will embark on the course of action I have urged on him lest some of these growers are driven out of business.

8.10 p.m.

Mr. David Crouch: We are all grateful that the Joint Parliamentary Secretary has come here to answer this debate at such short notice. We appreciate that he has come so soon after


answering Questions put by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) and me on the serious situation which apple growers face.
They have had a remarkable season. There was an exceptional summer and then an exceptional autumn. Figures I have seen show that the crop is 65,000 tons greater than it was last year. I do not think the Parliamentary Secretary will dispute that. It is not the sort of figure which can be swept under the carpet. It is true that prices reached at the farm gate are very low indeed. Best quality Cox's, which come from my part of the world are achieving a price better than 2d a lb. and are being sold for 6d. and 61d. a lb. I can quote evidence from a major co-operative in Canterbury, Home-Grown Fruits.
I was told that prices were "on the knuckle" for the best average quality for size and grade of Cox's at the moment. "On the knuckle" means a doubt whether there is any profit for the grower. We are not talking about growing as a sideline for a farmer. In my part of the world apple growing is the one interest of the farmer. There are farmers in my constituency who have 500 acres and more—sometimes 1,200—under apple crops. They depend for the sale of that crop on very heavy capital and intensive employment of labour. They need to be absolutely sure of getting the right price in the market.
In the country at the moment there is a system, which has been argued between the growers and the industry, whereby some imports are allowed in before Christmas. The amount is 15,200 tons. I do not believe we can ask the Minister at this time to recommend to the President of the Board of Trade alterations in that figure for quotas to be allowed in before Christmas. It is too late in the day to do that, and we accept the difficulties about licences which the Board of Trade has already granted.
After Christmas, I think I am right in saying, the amount of imports is to be 68,750 tons, which is the normal quota from January to the end of June. It is this figure which I hope will be reduced on the recommendation of the Minister of Agriculture, who is also the Minister of

Food. The Joint Parliamentary Secretary who is to reply to the debate is primarily responsible for horticultural matters. He has always taken these tasks very much to heart. He has taken his evidence from the growers in this country, and that has helped him to make his judgments and decisions.
I am speaking—as we all are—at short notice, but from a long experience, not as a grower but as one who lives among them and sees the sort of effort and investment which the grower has to make. I also witness the great amount of skilled work put into producing what I consider to be the best apples in the world, not only from my constituency for I am not speaking parochially. The English apple is in my opinion second to none in the world. The Apple and Pear Development Council, set up under the initiative of the Ministry, is doing a great job in proclaiming the advantages of British apples, both dessert and cooking, over foreign rivals.
The British grower is prepared to meet all comers. He is prepared to face the sophisticated task of promoting, publicising, packaging and presenting his product. He has to face very serious competition from abroad, particularly from France. The apple produced there, Golden Delicious, has much to make it attractive to the housewife. It is made especially attractive by its packaging, presentation and colour. At the moment in Marks and Spencer it is fetching a retail price of 2s. 6d. a lb. I maintain that for all its good looks and shining appeal it is greatly inferior once one bites it, for it has no flavour, to an apple which is selling in Marks and Spencers at Is. 6d. a lb.—the British Cox.
I am not seeking to raise the price for the British housewife at a time of severe increases in the price of foodstuffs. It would be irresponsible to suggest that, but I have a duty to be concerned not only with the price the consumer pays but that that price should be a fair one for the British farmer, a fair and reasonable price to keep the British grower in being producing apples which are second to none in the world.
There is no terriffic plea from growers but there is a belief among them that the Ministry will not let them down. All we are asking is just that. The figures are frightening. The crop is up by


65,000 tons. The Minister has an opportunity of making a recommendation. I ask the Parliamentary Secretary not to consider that in his replies to questions last week he provided the whole answer, although he was most reasonable. He said:
 Yes, we want to do all we can for the home producer. It is true, as I said in reply to an earlier Question, that the crop this year is much greater than last year, when, in fact, it was small.

I: am not very happy with that reference. He continued:
 But I also took the opportunity of pointing out that the import quota of 15,200 tons has not varied over a number of years and our own production is 18 times greater than that."—[OFFICIAL REPORT, 5th Nov., 1969; Vol. 790, c. 988.]
After that first sentence, which encouraged me, I was a little worried about his provisos and suggestions that may—be there were other factors that the Minister responsible for production might have to take into account.
I do not want to be unfair to the Minister, but he has responsibility for horticulture, which is an industry that presents the country with a tremendous opportunity not only in the production and dis? tribution of apples and pears but all other top-class fruit and vegetables—to save money on imports. Let the Minister give encouragement to saving money in this way.
Let him make a decision tonight, or certainly this week, before it is too late, before the licences have been issued, before the Board of Trade say, "Sorry, it is too late to come to us. We have worked faster than you". Let the Parliamentary Secretary get off the mark and show that he is all for greater production, development and higher profitability on the part of our home growers. I accept that he would be one of the first to proclaim his belief in British farming.
Some people may regard this as a small matter, but it is not. Thousands of people in this country are engaged in growing apples. They cannot suddenly switch to growing something else. They cannot grub up an orchard and plant it with some other crop in a matter of months or even of years. The soil is fouled, it has to be treated for bacteria, and, even allowing for the Government grant for grubbing and reploughing, it is an expensive matter.
We should take the opportunity to encourage the British grower against the possibility of even greater competition if and when we enter the Common Market. Of course growers are worried, but the best growers are not disheartened even by the prospect of an unrestricted flow of foreign apples. We should see that when circumstances change the British grower gets some measure of protection. The circumstances in this instance have been caused by the exceptional weather which has produced an abundant crop.
I am concerned to see that the farmer and grower gets a fair price for his crop, and that the Minister is as good as his word when, last week, he said that he would have at heart the problems of the home producer. I ask him this evening to give an assurance that he will seek to persuade his right hon. Friend the President of the Board of Trade to reduce quotas of imported apples after Christmas.

8.24 p.m.

Mr. Peter Mills: I am grateful to the Parliamentary Secretary for being present this evening and for taking part in this debate at such short notice. This is an important matter and is part of the great problem which affects imports of food. Apples and pears are important products to our home industry, and surely, at a time when there is such a large crop of home-produced apples, it is unnecessary to import more to overload the market.
It is true that an apple a day keeps the doctor away, but it is equally true that an apple a day from abroad is slowly killing the home producer. Surely the import quotas should not remain at their present level. In Kent and the South-West these heavy imports of apples are affecting the home producer. The country is acting like a man who has a garden that contains plenty of apple trees, which have produced well, who is too lazy to pick them and eat them himself, but who is prepared to go to a village some distance away to buy apples with money which does not belong to him. This is what we as a nation are doing. We are buying apples from abroad when we are producing them ourselves.
We are not even prepared to control imports of apples, and now is the time for this matter to be looked at carefully. I


urge the Minister to consult the Board of Trade and see what can be done to bring about a more flexible approach. We do not want to see apples priced out of the reach of the consumer. We want reasonably fresh apples, but we do not want to see the home producer slowly being put out of business owing to the heavy importation of apples. One knows what will happen then. Once the home producer is on the decline, then those who are importing apples will be able to demand whatever price they like. Control of imports has occurred in many other industries and there should certainly be control of imports of apples and pears. This is essential for the grower and is in the interests of the whole country with its balance of payments problems.
Producers in this country have sought to put their own house in order by modernising their orchards. They have spent a great deal of money and have been encouraged by the present Government, as well as by the previous Conservative Government, by virtue of various schemes, which I welcome. But it is most disheartening to those producers that, having grubbed up their old orchards to grow the right sorts of varieties, all their efforts become dissipated because of large imports.

8.30 p.m.

Mr. James Dempsey: Is the hon. Gentleman aware that in a recent edition of the programme "Today", a B.B.C. correspondent visited shopkeepers and put this very question to them? Everyone interviewed said that our apples were not nearly as attractively presented as they could have been and that, as a result, many members of the public preferred to purchase Golden Delicious from France? I have had personal experience of seeing apples literally shovelled into boxes. Would he not agree that—

Hon. Members: Too long.

Mr. Deputy Speaker: Order. I was about to ask the hon. Gentleman to bring his intervention to a conclusion.

Mr. Dempsey: Would the hon. Gentleman not agree that growers should present their apples in a more attractive manner?

Mr. Mills: While I always welcome interventions, that was rather long. When one reflects on what the hon. Gentleman said, it is a lot of nonsense to say—

Mr. Dempsey: The shopkeepers say it.

Mr. Mills: Mr. Deputy Speaker, I am speaking to you and, through you, to the Minister. The English grower has made rapid progress in seeing that his apples are packed and presented in the right way. This Government has encouraged him, and rightly so.

Mr. Alfred Morris: rose—

Mr. Mills: When an hon. Member gets to his feet, one assumes that he intends to give way—

Mr. Morris: I have no intention of giving way. My intention in rising was to ask the hon. Gentleman if he would give way.
Would he agree that there is no criticism from this side of the House of the British grower? There is every admiration for what is being done by the British grower. Would he also agree, however, that the British consumer must be taken into account'? The hon. Gentleman's party is all for levies on food imports. Will he spell out what he intends in this connection?

Mr. Mills: I would like to spell it out. I could enlarge upon our agricultural policy for two or three hours, if necessary. However, other hon. Members wish to speak. In this debate, we are discussing the heavy importations of apples and pears and the effect that they have on the British grower.

Mr. Dempsey: What about the effect on prices?

Mr. Mills: I hope that the hon. Gentleman will not mind sitting down for a moment.
We want to hear from the Minister what he intends doing about what has become a very serious problem. What consultations has he had with the Board of Trade with a view to arriving at a more flexible way of dealing with this heavy amount of home-produced apples? The British grower has done what he can to put his house in order. The


Government have given him their encouragement, and it is up to them to continue that encouragement and to see that he is protected from further importations of apples. It is necessary in the interests of the consumer, the grower and the country to control imports. That is not only true of applies and pears but of many other commodities.
I do not believe that it is true that apples produced by British growers are not up to standard. When apples are produced and not exported, inevitably it becomes necessary to dispose of a lot of "seconds" and "thirds". The French export only their best quality applies. Inevitably, there will be a lot of apples on the market which are not up to the first-grade quality, and that accounts for the fact that some apples fetch only 2d. or 3d. per lb. But when the best quality Cox's fetch only 6d. per lb.—

Mr. Ernest G. Perry: Wholesale.

Mr. Mills: That is a serious point. Quite rightly, hon. Gentlemen opposite study the interests of the consumer. They should be asking the Minister why, when growers get only 6d. per lb., the same apples are selling for Is. 6d. and more in the shops. When there is a glut of apples, the consumer should benefit. Instead of attacking me, hon. Gentlemen opposite should be attacking the Government, to discover what is happening. I hope that their questions will be directed to the Minister and not to me.
In the South-West, we have seen not only heavy imports of dessert apples affecting home producers, but the importation of very cheap apples from France for cider-making. That produce may be heavily subsidised, as French cheese is. The effect on producers of cider apples in the South-West has been disastrous. Many have gone out of business. Firms like Whiteways, Bulmers and other big cider manufacturers have been getting a large proportion of their apples from France. I regret this, because cider apples fit into the pattern of farming in the South-West. I hope that the Minister will say something about this, because it will be interesting to know whether he wants to see apple production continuing in this country.

Mr. Hoy: The hon. Gentleman said that all the cider firms were going out of business. No doubt he will give me some examples.

Mr. Mills: I beg the Minister's pardon. I did not mean to refer to cider manufacturers, but to cider apple growers going out of business.

Mr. Hoy: I hope that the hon. Gentleman will give me some proof of what he is saying. If I am to go into the matter, I am sure that he will send me the evidence on which his statement is based.

Mr. Mills: The right hon. Gentleman need not worry. He has only to look at the figures for the acreages of cider apples being grown to see what is happening. The growers are grubbing them up because of the heavy importation of cider apples. I am sorry if I made a mistake. I did not mean that cider manufacturers were going out of business. I meant to say that the growers were going out of business.—[HON. MEMBERS: "The hon. Gentleman said that."] My hon. Friends confirm that that is what I said. That is what I meant, and I hope that the position is now clear.
I do not want to see the cider apple industry in the South-West, in Hereford, and in other places, disappearing, but it is disappearing because of the heavy importation of cider apples from France. It will be interesting to hear whether the Minister wants the production of cider apples to continue in this country.
This is another instance in which the Government should take a far more serious look at the control of imports, and be far more flexible in their approach, so that not only the home producer is protected, but in the long run the consumer, too, is protected, which is just as important.

8.37 p.m.

Mr. James Dempsey: I shall be brief, but I could not resist the temptation to take part in the debate when I realised how little attention was being paid to the consumer problem. There are many apple, pear and other fruit growers—indeed, on the Clydeside we have one of the finest fruit growing areas in the country—but, as against the number of fruit growers, there are many more consumers, and we are therefore duty bound to look at the problem from that point of view. It may be


said that I do not represent any fruit growing industries. That may be true, but I represent 90,000 consumers, and they have a vested interest in the fruit growing activities of this country.
Who purchases the apples that are imported? The answer, of course, is the consumer. If she did not buy them, there would be no need to discuss the possibility of import quotas or controls. The reason why consumers buy these imported apples is fairly obvious to me. It is that they are much more attractively presented.

Mr. Peter Mills: Rubbish.

Mr. Dempsey: The hon. Gentleman says "Rubbish". It is not rubbish. I have heard numerous shopkeepers being asked why their customers do not buy English apples. Time and again the answer is that the French Delicious is much more attractively placed before consumers. It is well packed and wrapped in paper. It is made to look attractive to consumers who pass by the shops.

Mr. Crouch: We on this side of ths. House have not been saying that we seek to raise the price of apples to the consumer. Golden Delicious are fetching 2s. 6d. a lb. at the moment, while Cox's are fetching only ls. 6d. I am quoting Marks and Spencer's prices. We are not saying that we should go above 2s. 6d., but we should get a fair return for the continuation of one of the best aspects of British farming.

Mr. Dempsey: The hon. Gentleman is justifying my argument. Customers prefer to pay 2s. 6d. for French apples rather than 1s. 6d. for English apples because the French Delicious is much more attractively presented to attract consumers as they pass by the shops.
I invite hon. Gentlemen opposite to visit some of the greengrocers' shops in their constituencies. Let them look at the display of fruit in the shop windows. In many cases the French apple is much more attractively laid out. I am very fond of an English apple. I have had experience both in consuming and in distributing it. In my day I have sold it. When English apples arrive at some shops they are in no way prepared. Even hygienically they are not up to the preparation of the French Delicious.
I am not arguing whether or not the French apples are subsidised; that has nothing to do with it. Shopkeepers are there to sell their wares to the consumers, and it is what the consumers want that determines what the shopkeepers sell. From what I understand, it is the unfortunate fact that British consumers are inclined to prefer the French apple to the English apples. I intend no criticism of our growers or consumers. I am is anxious to encourage the growers as are hon. Members opposite. I am sure that the Government are also anxious to do this. But, although the Government can encourage, promote, stimulate, if the consumer says "I want the French apple" there is nothing the Government can do about it.
We still seem to be behind the French in our presentation and salesmanship techniques. There is an onus upon our salesmen and on our own citizens to purchase our own goods and food. Unless that lesson is taken in, no action by the Government can be effective.

8.42 p.m.

Mr. John Wells: I am glad to have an opportunity of following the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) because most of his remarks about the packing and presentation of English apples are some years out of date. In my car outside I have an extremely attractive bag of English apples. The House has probably heard enough from me on the subject of apples for a year or two, but I shall be glad to arrange for the hon. Member for Coatbridge to be sent a sample, to show exactly how good English apples are.
The fundamental truth is that French apples which have been packed to travel from France to this country have been packed to a very high grade in order to attract only the highest prices. My hon. Friend was right when he quoted a great retail outlet, which has a well-known line in good quality apples. But it also buys the best of the English apples. The hon. Member for Coatbridge must be fair about this. He must remember that there are many poor people—some of them, alas, in his constituency—who wish to buy the cheapest apples available. Those apples may taste very nice, but they may not have quite the same beauty. It may not be worth packing them particularly


well just to get a cheap apple in the shops for the hon. Member's constituents. He must not confuse what we are trying to get the Government to do tonight.
Some years ago a Conservative Government introduced the concept of grading apples, and this process has been strengthened and extended by the present Government. Apples are divided into three grades, and are sold, by law, in those grades in the wholesale markets. A greengrocer can buy Grade 1 apples, Grade 2 apples and Grade 3 apples, and he can then showel them all together and mix the up so that the customer is left with very little choice. The grading was done in the first place by growers in the constituencies of hon. Members present on this side of the House tonight, who all represent fruit-growing areas. We have all seen the packing sheds in our constituencies, and have seen that the quality of the apples is superb.
This summer soft fruit prices fell to the floor—especially in the case of blackcurrants. That was partly because of the substantial home crop, but another contributory cause, in the eyes of the growers, was the considerable increase in quotas…

Mr. Hoy: It is nothing.

Mr. Wells: The Minister says that it is nothing, but if we examine the quotas from behind the Iron Curtain—from countries such as Bulgaria and Rumania —we see that there have been increases in the permitted tonnage year by year.
Although, in the past, the quota system has stipulated that so much of the total amount of soft fruit imported must be of a certain variety and so much of another variety, everything now tends to be lumped together under a global total for soft fruit. This naturally enables exporting countries to send in just one variety. They can send all blackcurrants, or all raspberries.
What has happened in respect of poor soft fruit prices could happen in the case of the top fruit that we are primarily discussing tonight. If poor prices for soft fruit continue year by year the acreage will decline. The Minister must know that the acreage of soft fruit of all varieties is declining. He must be

able to see this from his annual reports. I am delighted that we now have a biannual horticulture survey. Although the acreage of strawberries for the current year has increased, the acreage of other soft fruits has substantially declined.
In 10 or 15 years, the home grower may be so disgruntled with his prices that he will switch production, and then we will have the situation outlined by the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris). He was frightened lest the consumer had a raw deal. He is opposed to the Common Market. If this country entered, our fruit growers would be in a sorry situation—

Mr. Alfred Morris: indicated assent.

Mr. Wells: I am glad that he agrees. He cannot have his cake and eat it. If he wants the consumers to have cheap food, he should bring it all in from Bulgaria, Rumania and the other countries which send us their food at rock bottom prices to get our currency. If, on the other hand, he wants the British grower to have a fair deal—I hope he does—if he wants country dwellers to have as fair a deal as he would like his urban constituents to have, he must allow him reasonable prices so that he does not suffer unfair competition.
If they suffer unfair competition, the growers will ultimately go out of business. One of my hon. Friends said that a number of cider apple producers were going out of business. When, two years ago, we debated the Order setting up the Apple and Pear Development Council, there was a schedule of cider varieties which were exempt from the levy. A well-known variety called Jenkins Balls was to be exempt—[Laughter.] If the hon. Member doubts me, he can check this in the Library. There will undoubtedly be a decline in production if the sensible interests of the growers are not considered.
The hon. Member for Coatbridge and Airdrie reminded us of the greengrocers of his constituency, but this morning I received a letter from the leading greengrocer—not a producer—in my constituency. He has branch shops at 36, High Street, Canterbury, he has a branch at Queen's House, Folkestone, another in Dover and another in Ramsgate and two


important corner shops in my constituency. He wrote to me:
I am rather concerned regarding the possible influx of foreign apples in the new year, as all home-produced dessert apples are now being sold in the market at under the economic value to the British grower. I feel that should we be flooded with foreign apples, it will create financial disaster to many a British apple grower. Considering the British crop this year is not a bumper one, this situation must geatly perturb the industry. I am all for competition, but I do feel we should protect our own industry first.
There could not be a fairer letter than that from a man who is selling apples rather than growing them.
I hope that the Minister will look very seriously at these quotas. I understand that the Parliamentary Secretary's right hon. Friend is to see the National Farmers' Union representatives tomorrow, so this debate is of particular importance. It will remind him that many hon. Members on both sides wish British growers well. I should like to remind the Parliamentary Secretary of a letter he wrote to my hon. Friend the Member for Saffron Walden (Mr. Kirk) on 25th March 1968. I should like to thank the hon. Gentleman, incidentally, for the painstaking way in which he always answers our letters. Dealing with the increase in quota which had been allowed that year because of the remarkably light home crop, he referred to a 50 per cent. increase in the earlier part and a 331 per cent. in the latter six months.
This increase in quota always seems to work that way. There is never a decrease, when there is a heavy home crop or even when, as my correspondent said, there is an average for reasonable home crop. I hope that these quotas will be re-examined and that the Minister considers not only the dessert apple or the cider apple but also the most reasonable, profitable and consistent line in recent years, the culinary apple. If there were any excess realignment of the quota period, this could have a disastrous effect on the culinary apple.
I hope that the Minister will consider the quotas as a whole rather than a small juggling with the dates between one part of the season and another. In his letter to my hon. Friend, he wrote:
… but you will realise that even if such a course were felt to be desirable it would be most difficult to pursue. The quota periods

for apples and pears starts in July, well before any reliable forecasts of home crops are obtainable.
I take issue with the Minister on that.

Mr. Hoy: What was the date of that letter?

Mr. Wells: It was dated 25th March, 1968.
As for the statement that one cannot alter the quota periods as late as July because reliable forecasts of home crops are not obtainable, a sub-committee of the Select Committee on Agriculture, which considered horticulture, and of which I was the chairman, had specific evidence from a number of experienced growers to the effect that they were well able to forecast the likelihood of their crops before July. The Minister rightly prides himself on how close he is in touch with leading growers. I urge him to look again at the possibility of making forecasts much earlier in the year.
The Minister has been kind enough to write a number of letters to me this autumn arising from complaints I have received from constituents who are growers, but I am not happy about his attitude over the importation of Yugoslav plums. Without wearying the House by reading the letter written to me by the Minister on 8th October, it falls within the general pattern of anxiety that we have about there being dumping or near-dumping.
The Minister wrote:
Anti-dumping action cannot, of course, be taken on the basis of rumour".
This we know, but the trouble is that by the time rumour has congealed and there is a substance of fact, the whole price for the season is lost. The implementation of the anti-dumping rules is difficult with highly perishable crops. Instead of relying on the last anti-dumping Act, which was an improvement on its predecessor, I hope that the Government will, in their consultations with the N.F.U. tomorrow, and in their subsequent deliberations, bear in mind the real and deep anxiety of the British fruit-growing industry.

8.58 p.m.

Mr. Alfred Morris: The hon. Member for Maidstone (Mr. John Wells) is a superb advocate of the British apple. His very cheeks bear testimony to the depth of his


sincerity in this important matter. Indeed, the whole House remembers his single-handed public relations exercise on behalf of the British grower, and we wish him well, for, like him, we value the British grower.
Other hon. Members have paid tribute to this industry. At short notice the hon. Member for Holland with Boston (Mr. Body) made ready to initiate this debate. He, too, is deeply informed on this subject and his speeches are always notable for their relevance to the problems facing this industry. I am grateful to him for introducing the debate, even without much notice.
We also recognise the deep and abiding interest of the hon. Member for Canterbury (Mr. Crouch) in the welfare of the British grower. He has an important constituency interest in this matter, and all of us respect the way in which he attempts, without any question of public relations exercises, either single-handed or otherwise, to bring to the attention of the House the problems which face the industry.
The hon. Member for Torrington (Mr. Peter Mills) made some hurtful remarks about the produce of our friends the French growers. I know that he is someone who has, as some would put it, pathological keenness, while others would call it enthusiasm, for closer relationships with the French. I warn him that he must not criticise the produce of our near neighbours in the way that some people will think he criticised them in certain of his remarks tonight.
It has been pointed out that the British housewife can buy foreign apples, including French, at 2s. 6d. a lb. and homegrown apples at ls. 6d. a lb. I am referring to Cox's and therefore to an apple which is of some quality. Hon. Members opposite are saying that the consumers should not have the privilege of deciding which apples they should buy. If that is their policy, they should make their point far more briefly than many of them have done in the debate. Certainly the interests of the consumers cannot be neglected by my right hon. Friend the Joint Parliamentary Secretary to the Ministry of Agriculture, who takes a close and continuous interest in this aspect of the Department's work and responsibility.

Mr. Crouch: Would not the hon. Gentleman consider it in the interests of the consumers that the Government should go in for a policy of import saving?

Mr. Morris: I must not extend the debate. Much can be said about the Government's import saving achievements. I have already said how I admire the way in which the hon. Member for Canterbury represents his constituents. I am certain he recognises that I have a considerable and personal interest in agriculture and can speak for a long time about the selective expansion programme and the way in which the Government have tried, against all the odds, to maximise import savings.
While the Ministry of Agriculture, Fisheries and Food must take account of the interests of the British grower, it must not ignore the claims of the British consumer. I recognise that there are problems for the British grower, but I am absolutely satisfied that my hon. Friend is as concerned for the interests of the British grower as he is for the interests of the British consumer.
I hope that in reply to the debate my hon. Friend will take serious note of all that hon. Members opposite said, but I emphasise that those who recognise the claims of the British grower and the claims of the British consumer should not be dismissed as they have been dismissed by some hon. Members opposite this evening. If the British housewife prefers a French apple at 2s. 6d. a lb. to a Cox's at ls. 6d. a lb., I regret that, but the choice must lie with the housewife and with the other consumers.
Naturally, we must see that our growers have a viable position. My hon. Friend is concerned for the British grower and for the viability and prosperity of the industry as much as is anyone on either side of the House, and I am certain that he will show it tonight in the way which we all admire.

Mr. Body: Will the hon. Gentleman overcome the point that the consumer does not always have the choice she ought to have? The difficulty arises in that 15,000 tons of applies come in from the non-sterling area, are brought in on contract at high prices, and have to be sold by the wholesalers, who are thus displacing the home-grown apple, to the disadvantage of the English consumer.

Mr. Morris: I am certain that my hon. Friend will deal with that point and will show his sympathy and support for the British industry.

9.5 p.m.

Mr. Paul Hawkins: I am grateful to have this opportunity, at somewhat short notice, to support my hon. Friend and neighbour, the Member for Holland with Boston (Mr. Body), in his plea for the prevention of the dumping of fruit and vegetables which we could well grow at home, often at a far better quality than some of the pulp and other matter dumped on us at, I believe, the instigation of the Board of Trade to further industrial exports.
I add my word of thanks to the Joint Parliamentary Secretary for coming here this evening. He may reflect that he has probably never been and never will he be so popular on this side of the House. With his interest in the horticulture industry, I feel sure that he has full sympathy for it. But practical steps must be taken; it is action, not sympathy, that is required by the industry. I had hoped, as I stated in a letter to the Joint Parliamentary Secretary, that the Department would set up a branch to look out for breaches of the dumping regulations, and not have to wait for a farmer or the N.F.U. to put forward a case.
One would have hoped that the Ministry of Agriculture, Fisheries and Food would have been in close touch with the Board of Trade. It was obvious from the evidence given before us in the Select Committee that the sole objective of the Board of Trade is to further industrial exports; it has not the slightest regard for the saving of imports, which is such a necessary part of its job.
I do not understand the way in which dumping is carried on when the "Little Neddy", the Select Committee and even the Government have all accepted that we could and should grow more at home for many reasons, including the balance of payments, and the necessity for agriculture to expand. Nothing practical is being done. I may be accused of spreading despondency and alarm, but I do not say this lightly. Never since the 1930s has the agricultural industry been so perplexed and worried about where it is going.
In today's Eastern Daily Press there is an advertisement by a grower asking for people to come and collect Cox's Orange apples at 8s. for 30 lb. They may not be top quality but that works out at about 3½d. a lb. I am afraid that when we go into the Common Market—[Hon. MEMBERS: "When?"]—if we go into the Common Market, which is the Government's policy, and the farmers' policy, if we grub up a large acreage here we shall not be able to export to the Continent large quantities of Cox's Orange apples, as I have always thought we should. We were told in Brussels that these apples have a quality entirely of their own, and that there would be a ready demand for them if they were properly publicised.
I join issue with those who have raised the question of the consumer. Of course, we must think of the consumer. All growers are consumers. Everyone whom we represent is a consumer, whether we represent a town or country constituency. But unless we have a viable home industry we shall be at the mercy of importers. We need to protect the home industry against dumping. When we have a good crop, let the quotas be flexible. They are flexible when we have a bad crop. I am not trying to tell the Parliamentary Secretary anything that he does not already know. I wish merely to put a little power behind him so that he can fight off the Board of Trade.
I take up remarks of my hon. Friend the Member for Maidstone (Mr. John Wells) about soft fruit. In my constituency we can and do grow some remarkable crops of blackcurrants. There are growers of excellent blackcurrants in the district around East Dereham, where a great deal of money has been invested in overhead irrigation for frost protection and grants have been paid by the Ministry which have helped to produce excellent crops. Yet the Board of Trade, which I repeat is the real enemy of home horticulture and agriculture, enters into trade agreements with countries like Rumania and Bulgaria to import blackcurrant pulp at cut rates and in greatly increased quantities over last year.
I have a letter from one of the main growers in my district, written in July this year, in which he quotes the purchaser of his crop as saying:
I regret prices which I can offer but demand is poor and will get worse.


Purchasers can offer only about £90 a ton, which is almost under the cost of production. even for growers who have gone in for modernisation, which has been done on a large scale in my area.
Many other crops in my area suffer from dumping, including chicory and carrots. I emphasise how important it is for this country to retain its fruit and vegetable industry so that the housewife and the consumer can always be certain of purchasing crops of good quality which I assure hon. Members opposite are being packed far better than they were and are extremely well presented in the shops and which should be given the support that is badly needed.

9.17 p.m.

Mr. Jasper More: I wish to intervene very briefly and to apologise to my hon. Friend the Member for Holland with Boston (Mr. Body) for not being able to be present to hear him introduce this debate. It is an example of a very good House of Commons debate, arising from the spontaneous indignation of those Members who wish to present the complaints of their constituents.
In my constituency, this is a marginal form of production. We have cider apples, eating and cooking apples and soft fruit, which are of importance to a limited number of my constituents, but to them they are very important. In the main, we have been speaking on the side of the producer, although there have been interventions on the side of the consumer, notably by the hon. Member for Coatbridge and Airdrie (Mr. Dempsey). However, there has been one misconception running through all those speeches—that is, that apples should be bought by the housewife.
That is fundamentally wrong. Apples should never be bought by the housewife. They should always be bought by the husband. Apples should not be judged by their appearance. The right way to judge apples is by their grade and species. There ought to be selective buying by those who really know the difference, not between bright green, bright red and bright yellow apples, but between historic names such as Cox's Orange Pippin or James Grieve—the Minister might even call this a James Grieve debate—and

about all Darcy Spice from the Eastern Counties.
I ought to pay tribute to the great work which has been initiated in this country by Sir Richard Boughey and his Apple and Pear Development Council. They have made a real contribution on the all-important question of types of produce and the way of presenting and selling it, and it is right that their work should be acknowledged. I hope that they may project their work into different fields and perhaps even in conjunction with what we have been doing here.
The House recently passed the Development of Tourism Bill, involving the granting of funds for the building or improvement of hotels in various parts of the country. I would like to hear it seriously suggested to those hotels which get public funds that on every hotel breakfast table there should be the different types of English apple which every Englishman should eat at least once each breakfast time, if only to keep the doctor away, and similarly with British Railways and all other publicly supported enterprises of that kind.
In addition to apples, quite a lot has been said in this debate about soft fruits, to which I wish briefly to refer, because the Minister may remember that I had some correspondence about this. He was good enough to send me at least two letters on the very difficult subject of blackcurrants and questions of import quotas. This has already been said ably and clearly by other hon. Members, and I wish only to emphasise how badly individual growers can be affected and the great damage that can be done, not only financially to the growers, but in the long term to consumers also. My hon. Friend the Member for Maidstone (Mr. John Wells) has pointed out the danger that growers will become discouraged to the extent of grubbing up their soft fruit acreages and finally leaving the country at the total mercy of the foreign producer. That is a very bad state for the housewife or even for the husband who might to do the buying.
As my hon. Friends have said, this all comes back to the Government in the two issues of import quotas and anti-dumping. As regards import quotas, which, I believe, are the responsibility of the Board of Trade—I think that we still


have a Board of Trade, in spite of the recent changes—I appeal to the Minister constantly to represent to the Board of Trade that it should try all ways to look ahead in these matters. This applies not only to import quotas, but also to antidumping.
I know that the question of antidumping is much more difficult, because evidence has to be collected and it can be a great rigmarole. In both cases, however, a more forward-looking approach is needed. The message that we would like the Minister to convey to the Board of Trade, if we still have one, is to unharden the arteries and try to look ahead.
We now have a Minister whose title I do not recollect but who is without actual responsibility for any part of our trading activity, yet in some way supervises the whole concept. I mean the right hon. Member for Grimsby (Mr. Crosland). He is really in the position which the late Sir Winston Churchill once described as one of exalted brooding, and what could be a better occupation for a Minister in that position than to concentrate his brooding on this problem of quotas, anti-dumping duties, and the proper timing thereof? May I suggest that that message be conveyed to the Minister, and may we thank the Joint Parliamentary Secretary again for coming to this debate.

9.25 p.m.

Mr. Gordon A. T. Bagier: I apologise to the hon. Member for Holland with Boston (Mr. Body), who opened this debate, for not having been here then, but I was not aware that there was to be a debate on this subject. I hesitate to come in upon it, a subject heartfelt, as the hon. Member for Ludlow (Mr. More) has indicated, but although we feel strongly about our growers and realise that their problems have got to be looked at when one thinks of antidumping duties and import quotas and so forth, we ought, too, to think about the consumers, the housewives.
We all agree that this year has been a quite abnormally good year for soft fruit growing, and probably for the first time we find ourselves with an absolute glut of what are popularly known as Cox's Orange Pippins and various other types

of apple grown in this country. Would that we could have it every year.
I am sure hon. Gentlemen will agree that my right hon. Friend, while he has to consider import duties and quotas, has also to consider the housewife. She deserves some consideration, too. She really ought not to be expected to calculate for a good summer this year and a bad summer another year and so on, and my right hon. Friend has to consider —and this is extremely important—giving her a choice. At this time, particularly, we may think that from the point of view of the balance of payments the housewife is wrong, but it is extremely important that she should have a choice between paying half a crown, if she wishes, for Golden Delicious or ls. 6d. for Cox's Orange Pippins.
Hon. Members who represent constituencies where the growers are ought not to lose sight of the type of person I represent, the consumer, the housewife, who buys the products and who would like not only in a period of peak production but every year to pay reasonable prices. I do not think this is a hard thing to ask for. It is something which is negotiable and which the Government have got to take into consideration. It is not something which the Minister can write into an Act of Parliament or into a quota. It is a matter of the luck of a season, luck with the sun, luck with water, luck with rain. The Minister really has to consider the matter over a far wider period of time.
I know that my hon. Friend always tries to be fair on this. Whenever I have talked to him about import duties and quotas he has always tried to be fair, and I am sure that hon. Members opposite, if they search their hearts, will agree that he has always tried to be fair about these things—import quotas and the protection of the home growers. These are important considerations.
I have sought to make only a brief intervention on behalf of the housewives and to plead that we do not lose sight of them while we consider what is fair and proper for the home growers.

Mr. Alfred Morris: The point may be that all of us on either side of the House should be stressing the intrinsic value of home-produced goods. None


of us has done enough to emphasise the quality of home production. The housewife may choose imported goods and we may think that she is wrong. The answer is to emphasise the quality of home production.

Mr. Bagier: My hon. Friend is exactly right; this is the point I am trying to make. By all means let us look after our home product and make sure that those who make their living in home produce get the best market available, but if they cannot always guarantee to fulfil the needs of that market to the advantage or satisfaction of the customer the customer must have some sort of thought in decisions reached by Government. I hope that the Parliamentary Secretary will deal with the question as it affects not only the grower but also the consumer.

9.31 p.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy): I can hardly open by saying that I am grateful for the notice given me for this debate. I had better put on record how it happened. It was not until just after half past seven that the hon. Member for Canterbury (Mr. Crouch) spoke to me about it. I gave him an assurance that if he wanted to discuss imports he had better get in touch with the Board of Trade. I can only think that, despite the joint efforts of hon. Members opposite, it was not possible to get in touch with the Board of Trade, and so this was put on to me. I do not complain about that. I hope that I shall be able to put certain things in perspective.
I should remind the House of what the problem is. It is true that this year there has been a fairly substantial crop of apples, unlike last year. Last year the prices to the consumer were certainly much higher than they are this year. The housewife has no objection to getting apples at this price, although she objected last year about the price she had to pay then. The complaint last year was rather different from the one this year.
I am grateful to my hon. Friend the Member for Sunderland, South (Mr. Bagier). He made a very balanced speech and spoke about how the Govern

ment had to operate to ensure supplies for the people of this country. I> am grateful not only for his remarks about supplies but to my hon. Friends the Members for Manchester, Wythenshawe (Mr. Alfred Morris) and Coatbridge and Airdrie (Mr. Dempsey) for reminding me that my Ministry is the Ministry not only of Agriculture and Fisheries but also of Food and that we have a responsibility to the consuming public. I try to be as fair as humanly possible to the producer and the consumer.
I am afraid that I shall have to repeat some figures which I gave last week, but if this matter is to be put into perspective that has to be done. It is true that we issue import licences for 15,200 tons and against that British production is 18 times greater. It is within that context that we have to think not only of what we can import but of what the home trade can do.
I have always felt that the home trade ought to do better. I think it is doing better now than it was doing a little time ago. I resent a little hon. Members opposite saying that we ought to encourage the home grower, for I remind the House that it was this Government that set up the Apple and Pear Development Council under Sir Richard Boughey. We were the first to do that. Some hon. Members opposite, although not all, had better remember the way in which they behaved when we took the Bill which became the Agriculture and Horticulture Act 1964 through Committee and were seeking to make provision for statutory grading of fruit and vegetables. They made a great deal of fun about some of the proposals. I hope that when we come to the House with Orders for certain other commodities they will receive the unanimous support of the House as helping to market British products.
Sir Richard Boughey and his council, with limited funds, have carried out a remarkable job in apple and pear production in this country. They have in their advertisements made an impact on consumers. If I may add a plug, which might be barred on B.B.C., I would say that if the housewife is wise she will buy British apples. Indeed, coxes pippins at ls. 6d. a lb., if that is what they are—and I will come back to this in a moment—are a very good buy indeed.
What we cannot do is to have an argument about prices and variations in them, or about quality. Last week it was said in the House by one hon. Gentleman that the best apples, well-graded, well-packed and of the highest quality, were selling for 2d. a lb. Not a single hon. Gentleman tonight repeated that figure. It does the industry no good to quote figures of that kind. Indeed, at the weekend I made certain inquiries, and I will not disclose what I discovered until I can verify them. If I were to say what I had heard it would not do the industry any good at all.
The prices given this evening by hon. Gentlemen opposite have all varied. Some say the growers get 3d., others that they get 31d., and the highest price mentioned was 62d. Surely there must be something wrong in the marketing and retailing system. The hon. Member for Canterbury said that it must be the Government's fault. The Government certainy get no money out of it. If somebody is buying apples at those prices and selling them for ls. 6d., then somebody in between is doing a little too well at the growers' and consumers' expense. Somebody who is interested in the matter might bend his energies to examining the problem in that respect.
I turn to whether we should restrict the sale of apples coming from other countries. One charge that cannot be made is that dumping is taking place—certainly not on the prices which have been quoted by hon. Gentlemen. One cannot in one breath talk about a price of 2s. 6d. a lb. and in the next talk about dumping. One can hardly say that the housewife is encouraging dumping by paying Is. a lb. more for foreign apples than she would have to pay for a very good product like cox's pippins.

Mr. John Wells: When the right hon. Gentleman reads the debate, he will find that hon. Members on this side when talking about dumping were referring to soft fruit, including plums. I do not think they were referring to apples.

Mr. Hoy: I associated their remarks with apples and pears. I picked up the point about soft fruit, plums, blackberries, blackcurrants, and so on. But this debate is about apples and pears, and that is what I am replying to.
The hon. Member for Torrington (Mr. Peter Mills) expressed his concern about imports of apples competing with home-produced cider apples. However, he is on difficult ground, because his constituency is boasting about its exports. I am told that there is a certain breed of cattle which is finding a very good market overseas. Apparently the hon. Gentleman does not mind selling overseas, but he objects to overseas producers selling to us. He must realise that business is a two-way traffic. I hope that he will keep that in mind. I would not like to see any reprisals affecting his constituency.
A number of hon. Members have referred to the presentation of home-produced apples. Under the guidance of th,:. Apple and Pear Council, the presentation of our produce has improved enormously. I defy anyone to say anything to the contrary. However, many people are prepared to pay more for produce which is well packed. I remember an hon. Member opposite complaining to me at Question Time about the importation of American carrots. He told me that they were so well-washed and packed that even his wife was buying them. My advice to him was to take up his complaint with his wife.
I intend to say nothing about the Common Market or about those who want us to go in and those who want us to stay out. I am told that this goes right across the board. I was surprised to hear an Opposition Whip asking, "Who wants to go in?" I understand that many of those who appointed him want to go in, and I am sure that he will forgive me if I do not reply to that part of the debate.
It is difficult for me to go much further about horticulture than I went at Question Time. No Government for a long time have given greater encouragement to those engaged in Britain's horticulture, and in a forthcoming Bill we plan to increase the sum which we can give in the form of grants. In the last three years, we have paid out over £9 million under the H.I.S. That is a considerable sum, and obviously we want the industry to earn its keep. We are just as interested as anyone else, if not more so.
Perhaps I should say officially that tomorrow we are meeting representatives


of the industry to discuss this very problem. They have asked to see the Minister, and I assure hon. Members that I shall be there as well. We shall want to discuss with them what is best not only for the industry but for the country. Having said that, I hope that hon. Mem

bers will accept that their points will not be overlooked and that they will be taken into consideration, together with many others that they have not raised.

Question put and agreed to.

Adjourined accordingly at sixteen minutes to Ten o'clock.